Investing.com - The dollar fell to two-month lows against the yen on Tuesday as sharp falls in Asian equities overnight fuelled increased safe haven demand, after weak U.S. factory data sparked concerns over the outlook for economic growth.
USD/JPY hit 100.76, the weakest since November 21 and was last up 0.02% to 100.99.
The pair was likely to find support at 100.50 and resistance at 101.90.
Japan’s Nikkei posted its largest one-day decline since June on Tuesday, falling 4.2%, as weak U.S. manufacturing data reinforced negative investor sentiment.
The drop in the dollar came after the Institute for Supply Management’s manufacturing index fell to a seven-month low in January, as new orders slumped.
The disappointing data sparked concerns over the outlook for the U.S. recovery, ahead of Friday’s U.S. jobs report for January, after December’s report showed that the economy added far fewer jobs than expected.
Demand for the yen was also supported by ongoing unease over emerging markets, following a selloff in assets perceived to be risky on Monday.
The euro fell to two-and-a-half month lows against the yen, with EUR/JPY touching lows of 136.24.
Elsewhere, the euro was little changed against the dollar, with EUR/USD inching up 0.03% to 1.3531.
The euro remained supported after data on Monday showed that the euro zone’s manufacturing sector continued to recover in January.