The Japanese yen rose against other major currencies Tuesday after U.S. consumer sentiment weakened and talks on Europe's debt crisis appeared to break down.
The dollar fell to a record low against the yen after news that U.S. consumers' views of the economy are the worst since the middle of the Great Recession. The Conference Board's index of consumer sentiment was the worst since March 2009, far lower than analysts had expected.
The yen is considered safer than most currencies because it is less likely to lose value quickly, and because holders can use yen to invest in Japanese companies.
The dollar rose to 75.96 yen at 1:42 Eastern time from 76 late Monday. It fell to a record low of 75.71 at 11 a.m.
The yen has benefited from recent signs that the U.S. economy is barely growing. Both the dollar and yen are considered safe compared to other currencies, so they tend to rise when markets get rattled and the economy weakens. When the U.S. economy shudders, the yen's appeal over the dollar increases.
The euro plunged against the yen after European finance ministers canceled a planned meeting ahead of a much-hyped summit about the debt crisis there. Leaders appear unable to agree on a set of measures aimed at propping up banks, bailing out Greece and preventing the contagion from spreading to larger countries.
Investors have been hoping that a plan to address the crisis would be agreed to at a summit on Wednesday. The plan was originally scheduled to be released on Sunday.
The euro fell to 105.71 yen from 106.1 late Monday. It sank as low as 105.25 just after 11 a.m.
In other trading, the euro fell to $1.3918 from $1.3951 late Monday. The pound rose to $1.6006 from $1.6002.
The dollar soared a percent against the Canadian dollar, to 1.0141 Canadian dollar from 1.0043.
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