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[NEW YORK] The yen hit a one-year high versus the dollar on Wednesday as investors sought the haven currency amid a rout in equity markets and worries about the faltering world economy.
The dollar fell to 115.98 yen, its lowest level in a year, before recovering somewhat around 2200 GMT to 116.92 yen, down 0.6 per cent from the same time Tuesday.
"America's dollar tumbled nearly a per cent to one-year lows against the yen, a popular refuge when global risks rise," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
"Coupled with a weakening Chinese economy, the big fear is that sliding oil prices could do the same to inflation, raising the risk of economy-choking deflation taking hold around the world."
The euro dropped 0.8 per cent against the Japanese currency and was modestly lower against the dollar a day ahead of the European Central Bank's first monetary policy meeting of the year. The ECB is widely expected to leave its easy-money policy unchanged.
The Bank of Canada kept its key lending rate at 0.5 per cent Wednesday, giving a boost to the Canadian dollar, one of the currencies hardest-hit by the fall in oil and other commodity prices. The loonie traded around US$1.4505, up about 0.5 per cent from Tuesday.
As oil prices struck fresh 12-year lows, the Russian ruble sank to an all-time low against the dollar, exceeding the levels seen during the shock plunge of the Russian currency in December 2014.
The dollar climbed past the 82 ruble mark for the first time, and the Russian currency also weakened against the euro to a low last seen in the late-2014 selloff.