A broad decline in commodity and stock prices in major world markets raised the yen on Thursday in a search for low-risk assets prompted by the prospect of prolonged low inflation and negative interest rates.
The yen, which investors prefer in times of market uncertainty, reached a three-year peak against the euro and a five-week high versus the U.S. dollar.
"It's generally a cautious mood today. You have stocks lower and yields lower," said Eric Viloria, currency strategist at Wells Fargo Securities in New York.
German 10-year Bund yield and British 10-year Gilt yields reached record lows at 0.024 percent and 1.222 percent respectively on Thursday, as falling yields put pressure on bank shares and the broader market globally. Oil prices retreated from their highest levels of the year but held above $50 a barrel.