The dollar fell to a five-month low against the yen on Monday as rising tensions over North Korea stoked demand for the safe-haven Japanese currency.
The U.S. dollar retreated to 108.14 yen, its lowest since mid-November before recovering some ground to trade up 0.01 percent at 108.62 .
"We are seeing once again a little bit of a flight to safety as a result of the news over the weekend of North Korea's attempted missile test. That's resulting in a little bit of a weakness in the U.S. dollar," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The euro and the pound slid to five-month troughs of 114.87 yen and 135.63 yen, respectively, before reversing course to trade slightly higher against the yen. The euro was last up 0.41 percent at 1.0653 against the dollar and the pound was last up 0.46 percent at 1.2579 against the dollar.
Tensions on the Korean peninsula have escalated as U.S. President Donald Trump takes a hard rhetorical line with North Korean leader Kim Jong Un, who has rebuffed admonitions from China and proceeded with missile tests.
North Korea launched a ballistic missile on Sunday but it blew up almost immediately.
U.S. Vice President Mike Pence put North Korea on notice on Monday, warning that recent U.S. strikes in Syria and Afghanistan showed that the resolve of President Donald Trump should not be tested.
The demand for other safe haven assets also picked up and gold hit a five-month high on Monday.
Rising geopolitical tensions in North Korea sent U.S. Treasury yields to five-month lows overnight as increased geopolitical tensions in North Korea hurt risk sentiment and weak economic data boosted demand for the bonds.
"That's keeping the overall tone of the dollar somewhat depressed here," Esiner said.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.38 percent at 100.18.
The Turkish lira rallied over 2 percent against the greenback after President Tayyip Erdogan won a narrow victory in a referendum granting him sweeping powers.
The lira traded at 3.6636 against the dollar early on Monday, surrendering some of the gains which it made overnight. The lira was last down 1.59 percent against the dollar at 3.6715.