Investing.com - The yen remained close to recent highs against the dollar and the euro on Tuesday one day after a selloff in global equities hit risk appetite and bolstered demand for the safe haven Japanese currency.
USD/JPY slid 0.22% to 119.16, not far from the two-and-a-half month low of 118.69 set on Monday.
EUR/JPY was down 0.46% to 128.78, close to Monday’s eight-month trough of 128.67.
Global equities dropped sharply on Monday after data from China showing that manufacturing activity contracted for the tenth straight month in December rekindled fears over a China-led slowdown in global growth.
Risk sentiment was also hit by escalating tensions between Iran and Saudi Arabia.
Asian shares gave up early gains on Tuesday as concerns over China continued to weigh, but markets in Europe were higher after the open.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% to 99.19, recovering from Monday’s lows of 98.12.
The dollar index ended 2015 with gains of almost 9%, bolstered by the diverging monetary policy stance between the Federal Reserve and other world central banks, particularly the European Central Bank and the Bank of Japan.
The euro was close to three-week lows against the dollar, with EUR/USD falling 0.37% to 1.0790.
The single currency remained under pressure after data on Monday showing that German inflation slowed in December, adding to pressure on the European Central Bank to step up measures to boost price growth in the euro area.
The euro zone’s statistical bureau Eurostat was to publish its flash estimate for inflation in the bloc later Tuesday.