Investing.com - Investing.com - The dollar slid to one-week lows against the safe haven yen on Wednesday after a sharp selloff in Chinese shares overnight revived worries over the outlook for global growth.
USD/JPY hit lows of 112.23, the weakest since March 1.
Tuesday's weak Chinese trade figures and slide in oil prices have rekindled concerns over a possible slowdown in the global economy.
The yen also found support following reports that the Bank of Japan may refrain from cutting interest rates at its monetary policy review next week.
Reuters reported Wednesday that the BoJ will refrain from further easing after January's shock decision to deploy negative interest rates failed to prevent the appreciation of the yen.
The yen has risen to its highest level against the U.S. dollar in more than a year amid the global market turmoil since the start of 2016.
A weaker currency has been a key element of Japanese Prime Minister Shinzo Abe's economic program, known as Abenomics, helping to boost exports.
The growing view that the BoJ's loose monetary policy measures are losing their effectiveness has also contributed to the yen's strength.
Separately, Prime Minister Abe indicated Wednesday that a planned sales tax hike in April may be delayed, with Japan's economy is on the brink of another recession.
Japan's economy contracted 1.1% in the final quarter of 2015 and the economy is not expected to rebound significantly in the first quarter.
An initial increase in the sales tax in 2014 tipped Japan's economy into recession.
The yen extended gains against the euro, with EUR/JPY down 0.65% at 123.19.
The single currency came under broad selling pressure amid expectations that the European Central Bank will almost certainly ease monetary policy again this week.
The ECB is widely expected to cut rates further into negative territory at the conclusion of its monetary policy review on Thursday.
The bank is also expected to enlarge its asset purchasing program in a bid to combat persistently low levels of inflation in the euro area.
The ECB has already cut its deposit rate to minus 0.3% and is pumping €60 billion a month into the economy via asset purchases.
The euro was lower against the dollar, with EUR/USD down 0.42% to 1.0963.
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 97.41, boosted by weakness in the euro.
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