Investing.com - The safe haven yen strengthened against the other major currencies on Tuesday as oil prices slipped again, dragging equities lower while the euro and sterling remained on the defensive following steep losses in the previous session.
USD/JPY fell to lows of 111.86, the weakest since February 12 and was last at 112.17, off 0.65% for the day.
Oil prices rallied on Monday amid hopes that declining U.S. shale output would help support prices.
The rally in oil boosted global equity markets but oil turned lower on Tuesday amid fears that any decline in U.S. output would be offset by increased production from Iran.
The euro was at three year lows against the yen, with EUR/JPY down 0.64% at 123.72.
The single currency was steady at almost three-week lows against the dollar, with EUR/USD at 1.1028 after ending the previous session down 0.87%.
The euro was hit by fears that a British exit from the European Union could have a negative impact on the euro zone.
Adding to the gloom, data on Tuesday showed that German business confidence deteriorated to the lowest level in more than a year in February, amid concerns over slowing global growth.
German research institute Ifo said its business climate index fell to 105.7 from January’s 107.3 and below forecasts for 106.7.
The pound edged lower against the dollar, with GBP/USD easing to 1.4128 after falling as low as 1.4056 on Monday. The pair ended that session down 0.8%.
The drop in the pound came after London Mayor Boris Johnson said he would back the campaign for Britain to leave the EU in a June 23 referendum.
The announcement dealt a blow to U.K. Prime Minister David Cameron’s campaign to remain in the bloc and added to uncertainty over the outcome of the referendum.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, little changed at 97.37, holding below Monday’s three-week highs of 97.61.