The yen gained against key peers like the dollar and euro on Wednesday as sagging stocks and crude oil drove bids for the safe-haven currency.

Undercutting upward momentum for equities, oil prices retraced earlier gains made at the week’s start and tumbled after Saudi Arabia ruled out production cuts.

Japan’s Nikkei was down 0.7 per cent and other Asian stock markets were also in the red.

The euro lost 0.2 per cent to 123.215 yen, within reach of a near three-year low of 123.09 hit on Tuesday. The dollar slipped to an 11-day low of 111.75 yen and last fetched 111.955.

“The yen in theory is not a currency that should be attracting bids. But speculative buying continues to push the yen higher, and the trend will continue as long as participants feel relatively safe buying the currency,’’ said Koji Fukaya, president of FPG Securities in Tokyo.

Fed rate hike

The dollar was expected to have an edge over the yen at the start of the year, when the Federal Reserve was seen embarking on a series of interest rate hikes.

But recent global market volatility involving sharp downturns in equities and commodities has tempered US rate hike expectations, enhancing the appeal of the safe-haven yen.

The Bank of Japan had adopted negative interest rates late in January but the shock move was unable to arrest the yen’s appreciation, with the currency soaring to a 16-month high against the dollar earlier in February.

BOJ Governor’s statement

Yen bulls were emboldened after BOJ Governor Haruhiko Kuroda had said on Tuesday that expanding base money alone will not immediately lead to price rises and a heightening of inflation expectations.

Further highlighting the plight of central banks tasked with combating deflationary pressures and shoring up their economies, Swiss National Bank (SNB) Chairman Thomas Jordan said that unconventional monetary measures had their limits and needed continuous reassessment.

The SNB also practices negative rates but the Swiss franc has remained strong due to its safe-haven status. The dollar fell 0.8 per cent against the Swiss franc overnight and last stood almost unchanged at 0.9923 franc.

The euro was steady at $1.1011 after dipping to about a three-week trough of $1.0990 overnight.

Dovish comments from a Federal Reserve official helped curb the common currency’s losses against the dollar.

Dallas Fed chief Robert Kaplan told the Financial Times that the central bank may need to keep interest rates unchanged for an “extended period’’ to give inflation time to rise back to the its 2 per cent target.

“The euro came under pressure but the magnitude of its decline was nominal compared to other major currencies because of risk aversion and the fact that $1.10 is being defended aggressively,’’ wrote Kathy Lien, managing director of FX strategy for BK Asset Management.

“However, weaker economic data and the risk of Brexit should lead to further losses in the currency.’’

The possibility of Britain leaving the European Union continued to buffet the pound, which nudged down to a fresh seven-year low of $1.3964.

The pullback in global risk appetite and sliding oil prices dragged down commodity-linked currencies like the Australian dollar.

The Aussie was down 0.1 per cent at $.7192. The previous day it had reached $0.7259, the highest since early January on a rise in iron ore, Australia’s key export.

The Canadian dollar, another commodity-linked currency, steadied at C$1.3808 per dollar after shedding 0.6 per cent on Tuesday on crude oil’s slide.

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