The yen gained on Tuesday as traders favoured the safe-haven currency after the United States announced it was considering tariffs on $11 billion of European goods and the International Monetary Fund downgraded its outlook on the global economy.
These factors weighed on market sentiment, spurring selling on Wall Street and touching off a partial reversal of earlier gains in oil prices. The pull back in crude and other commodity prices cut into the initial gains of the Canadian and Australian dollar as well as emerging currencies.
"Yen is now the top dog with lower stocks weighing on risk appetite," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
In late US trading, the yen was 0.34% higher at 111.12 per dollar and up 0.3% per euro.
Major US stock indexes were lower with the S&P 500 index down 0.67%.
Brent oil futures settled down 0.69% at $70.61 a barrel after hitting $71.34 earlier on Tuesday, the highest since November.
Russia indicated a possible easing from its output-cutting deal with Opec overshadowed the prospect that violence in Libya could further tighten global supply.
On Monday, the US Trade Representative proposed a list of European Union products ranging from large commercial aircraft and parts to dairy products and wine on which to slap tariffs as retaliation for European aircraft subsidies.
The IMF on Tuesday cut its global growth forecasts for 2019 to 3.3%, the slowest expansion since 2016 and from its earlier projection of 3.5% in January.
While the IMF reduced its calls on expansion for both Europe and the United States, the euro clung to its modest gains versus the dollar, last up 0.05% at $1.12655.
"Lots of negativity is already baked into the euro. Today's developments, while not encouraging, didn't meaningfully add to the bloc's weak narrative," Manimbo said.
The latest IMF forecasts, together with the retreat in oil prices, put pressure on the Australian and Canadian dollars. Both countries are big commodities producers.
Currencies of oil producers including Norway, Russia and Mexico retreated from their earlier highs. The Aussie was essentially unchanged at $0.71255 after touching a near three-week high, while the loonie was little changed at C$1.3323 after hitting C$1.3285, its strongest since March 21. Meanwhile, sterling was down 0.14% at $1.3045 after a German government spokesman denied a media report that Chancellor Angela Merkel was open to putting a time limit on the Northern Ireland backstop in a Brexit agreement.