The dollar fell on Tuesday to its weakest against the yen since October 2014 as investors pulled away from riskier assets, pushing shares and oil prices lower as the outlook for U.S. interest rates remained clouded.
The Japanese currency, often sought in times of market turmoil or economic uncertainty, fell as low as 110.30 per dollar JPY= as shares fell in Europe and Asia.
U.S. stocks also looked set open lower, according to index futures ESc1 1YMc1.
Oil, which fell in recent days on fading prospects of agreement among producers to curb oversupply, took another hit from data showing U.S. demand for gasoline declined in January for the first time in 14 months.
Further muddying the waters for investors, two senior officials of the U.S. Federal Reserve said the market's views of when the central bank would raise interest rates may be too "pessimistic".
Just a week ago, Fed Chair Janet Yellen said the Fed would proceed cautiously in raising rates -- remarks viewed as dovish and which drove U.S. stocks to 2016 highs.
The dollar fell 0.8 percent against the yen and last traded at 110.37 yen. The euro EUR= fell 0.3 percent to $1.1354.
"Clearly risk sentiment is not good and oil prices are declining this week and ... driving the dollar lower against the yen," said Yujiro Goto, currency strategist at Nomura in London.
The Australian dollar AUD= fell with commodity prices and dropped nearly 1 percent to $0.7533, having risen after the Reserve Bank of Australia left interest rates unchanged, as widely expected.
In stock markets, the FTSEurofirst 300 share index .FTEU3 dropped 1.8 percent. Germany's DAX index .GDAXI slid 2.3 percent after data showed German industrial orders unexpectedly fell 2.1 percent in February due to weak foreign demand, especially from euro zone countries.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was earlier down 1.7 percent. Japan's Nikkei index .N225 fell 2.4 percent to an eight-week closing low.
Chinese shares bucked the trend, closing up 1.3 .CSI300 to 1.4 percent .SSEC as trading resumed after a market holiday.
Oil prices, down from above $100 a barrel since mid-2014 on a global supply glut to a trough of $27.10 in late January, fell again after the U.S. Energy Information Administration said on Monday that gasoline demand fell 0.6 percent in January. Total U.S. oil demand fell 1 percent compared with January 2015.
Brent crude LCOc1 traded 26 cents lower at $37.43 a barrel, down from a 2016 high of $42.54 touched in mid-March.
"As long as most speculative money is long-positioned, there is more room for closing positions and falling prices," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
As stock prices tumbled, yields on low-risk government bonds fell. German 10-year yields DE10YT=TWEB, the benchmark for euro zone borrowing costs, fell as far as 0.08 percent, their lowest in almost a year.
"The data signals weaker export growth, softer demand both within the euro zone and abroad and thus suggesting that the ECB's challenge as regards boosting inflation and inflation expectations is and will remain very much an uphill battle," Rabobank strategist Matt Cairns said.
U.S. 10-year Treasury yields US10YT=RR fell nearly 6 basis points to 1.72 percent, their lowest since March 1.
Gold, another perceived safe haven and a top-performing asset in the first three months of 2016, rose 1.4 percent, reversing losses of 1.4 percent chalked up in the last two days. It traded at $1,231.40 an ounce.
Copper CMCU3 edged down 0.1 percent to $4,757.50 a ton.