Dollar tumbles vs. yen in risk-off trade

The dollar fell to two-and a-half month lows against the yen on Thursday as fears over the future of central banks stimulus saw investors move out of riskier assets and into the safe haven yen.

During European morning trade, the dollar fell to its lowest level since April 4 against the yen, with USD/JPY falling 1.89% to 94.17.

The yen strengthened against the dollar and the euro following sharp falls in Japanese equities overnight as concerns over the prospect of an end to central bank stimulus fuelled a broad based sell-off in risk assets.

Earlier this week the Bank of Japan disappointed expectations for measures to ease volatility in the government bond market. The BoJ’s lack of action, along with expectations that the Federal Reserve will begin to scale back its bond buying program has fuelled widespread risk aversion.

The dollar was close to three-and-a-half month lows against the euro, with EUR/USD inching up 0.06% to 1.3342.

Elsewhere, the greenback was slightly higher against the pound, withGBP/USD slipping 0.14% to 1.5656.

The dollar slid against the Swiss franc, with USD/CHF losing 0.17% to trade at 0.9190. 

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with AUD/USD inching up 0.07% to 0.9488,NZD/USD down 0.59% to 0.7933 and USD/CAD falling 0.25% to 1.0186.

The Reserve Bank of New Zealand kept rates unchanged at 2.5% following its latest policy meeting on Thursday and said it expected rates to remain on hold for the rest of this year.

In Australia, official data showed that the economy added 1,100 jobs in May, confounding expectations for a decline of 10,000 and the unemployment rate ticked down to 5.5% from 5.6% in April.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% to 80.90. 

The U.S. was to release official data on retail sales and the weekly government report on initial jobless claims later in the trading day.