Investing.com - The yen rallied against the dollar and the euro on Wednesday as Chinese shares continued to plunge overnight, bolstering demand for safe haven investments.
USD/JPY was down 0.73% to 121.65, the lowest level since May 26.
Chinese shares fell sharply on Wednesday, extending a broad based selloff despite fresh regulatory measures to restore investor confidence.
The selloff has been fueled by concerns over a slowdown in the world’s second largest economy and exacerbated by worries over risks to financial stability from the turmoil in the market.
The yen was trading close to one-month highs against the euro, with EUR/JPY down 0.71% to 133.98.
The euro held steady against the dollar, with EUR/USD at 1.1006, holding above the one-month trough of 1.0915 hit on Tuesday.
The single currency remained supported by hopes for a plan to avoid Greek bankruptcy and an exit from the euro zone after European leaders gave Athens a five-day deadline to come up with a new bailout deal.
At an emergency euro zone summit on Tuesday evening European leaders handed Greece an ultimatum - it has five days to strike a new bailout deal with its euro zone creditors or face a banking collapse.
The Greek government was to present a formal application later Wednesday for a new rescue package from the European Stability Mechanism, the euro zone’s permanent bailout fund.
If an agreement cannot be reached in time, European Union leaders will hold an emergency summit in Brussels on Sunday to discuss how to contain the fallout from a Greek exit from the euro zone.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.81, little changed for the day.