Investing.com - The dollar fell to one-and-a-half month lows against the broadly stronger yen on Wednesday, dropping more than 1% as plunging Chinese stocks bolstered investor demand for the safety of the Japanese currency.
USD/JPY hit lows of 121.02, the weakest since May 22 and was last at 121.13, off 1.16% for the day.
Chinese shares fell sharply on Wednesday, extending a broad based selloff despite fresh regulatory measures to restore investor confidence.
The selloff has been fueled by concerns over a slowdown in the world’s second largest economy and exacerbated by worries over risks to financial stability from the turmoil in the market.
The yen was trading close to one-month highs against the euro, with EUR/JPY down 0.86% to 133.74.
The euro pushed higher against the dollar, with EUR/USD up 0.3% to 1.1044, off the one-month trough of 1.0915 hit on Tuesday.
The single currency remained supported by hopes for a plan to avoid Greek bankruptcy and an exit from the euro zone after European leaders gave Athens a five-day deadline to come up with a new bailout deal.
At an emergency euro zone summit on Tuesday evening European leaders handed Greece an ultimatum - it has five days to strike a new bailout deal with its euro zone creditors or face a banking collapse.
The Greek government presented a formal application on Wednesday for a new rescue package from the European Stability Mechanism, the euro zone’s permanent bailout fund.
If an agreement cannot be reached in time, European Union leaders will hold an emergency summit in Brussels on Sunday to discuss how to contain the fallout from a Greek exit from the euro zone.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.27% to 96.61.
Investors were looking ahead to the minutes of the Federal Reserve’s June meeting, due for release later in the day, for fresh indications on the possible timing of an initial rate hike.