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Tokyo - The yen extended its gains in Asia on Wednesday and emerging currencies tumbled as traders fled to safe investments on the back of another collapse in oil prices that fuelled fears about the global economy.
The plunge in crude to 12-year lows back below $30 has sent shudders through world equity markets, while more weak data on manufacturing out of China and US this week pointed to a sharp slowdown in the two key drivers of global growth.
In Tokyo, the dollar slipped to ¥119.59 from ¥120.01 in New York and ¥120.96 on Monday, although it was still up from ¥118.60 last week before the Bank of Japan said it would adopt a negative interest rate policy.
The euro dropped to ¥130.53 from ¥131.01, while the single currency edged up to $1.0919 from $1.0917.
US benchmark West Texas Intermediate crashed more than 11% on Monday and Tuesday to fall back through the $30 level for the first time since January 21. Brent lost almost six percent in the same period.
And on Wednesday the losses piled up ahead of a US report that analysts warned could see a further increase in stockpiles. WTI lost 1% and Brent 0.9% in early Asian trade.
"With recent major central bank policy announcements out of the way it was back to oil market watching," Jason Wong, a Wellington-based currency strategist at the Bank of New Zealand, wrote in a commentary.
"The risk-off setting shows up in forex movements, with the yen and the euro the strongest currencies and the commodity currencies amongst the weakest."
Among emerging currencies the oil-linked Malaysian ringgit took a beating, losing 0.8% against the dollar, while the Indonesian rupiah also shed 0.8%. Australia's dollar tumbled 0.3%, the Indian rupee was 0.4% off and South Korean won 1% lower.
