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Sterling slides on Brexit fears; safe-haven yen soars

Sterling tumbled to a seven-year low on Wednesday on heightened fears of a possible British exit from the European Union, while the safe-haven yen gained broadly as global risk appetite crumbled.

Sterling fell below $1.39 for the first time since early 2009 on persistent concerns that a June 23 referendum could lead to a "Brexit."

"We've got a combination of risk-negative markets, which commodities seem to be leading, and an element of independent sterling weakness on top of that," said RBC Capital Markets' head of currency strategy in London, Adam Cole, adding that Brexit risk would become a more important driver of global risk appetite as the referendum drew nearer.

The pound last changed hands at $1.3927, down 0.59 percent.

"The euro is also getting dragged down a bit by the EU concerns, so if you're looking for a safe haven you're probably ... more likely to choose the yen," said Rabobank currency strategist Jane Foley.

The yen gained against most currencies as falling oil prices and British exit fears drove interest in the currency.

Oil fell below $33 a barrel after Saudi Arabia ruled out production cuts and data showed U.S. crude stockpiles hit a record high. That soured appetite for riskier assets and boosted demand for currencies such as the Swiss franc and the yen, which tends to struggle in times of increased risk appetite because it is often used to fund investments in riskier, but higher-yielding currencies.

In times of market stress, investors typically sell those riskier assets and buy back the Japanese currency.

The euro hit a three-year low against the yen. The dollar meanwhile hit a two-week low of 111.10 yen, taking it close to a 15-month low of 110.85 hit earlier in the month. It last traded at 111.82.

"Oil back in the red has given the dollar a boost against some currencies, but it's all about the safety bid-yen," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

The Swiss franc gained, pushing the dollar down 0.33 percent on the day at 0.9884.

Oil-rich Norway's crown took a heavy beating among developed-world currencies, falling to a one-month trough against the dollar and also shedding 1.73 percent against the yen. The dollar was last up 0.83 percent at 8.6802 crowns.