Dollar touches 17-month low vs. yen as stocks slump
By Chuck Mikolajczak
NEW YORK (Reuters) - The dollar fell on Tuesday to touch its weakest level against the yen since October 2014 and stock markets worldwide slumped as economic data out of Europe and the United States prompted a retreat from riskier assets.
The Japanese currency, often sought in times of market turmoil or economic uncertainty, strengthened. Bank of Japan Governor Haruhiko Kuroda, speaking to parliament on Tuesday, stressed his readiness to expand monetary policy, such as pushing interest rates further into negative territory.
Wall Street followed declines across Europe and Asia. The MSCI All-World Index .MIWD00000PUS dropped 1.4 percent, on target for its worst day since early February.
In New York, shares of Dublin-based Allergan (AGN.N: Quote) were hammered after the U.S. Treasury Department on Monday unveiled rules designed to curb corporate tax inversion mergers that could possibly stymie the company's tie-up with New York-based Pfizer Inc (PFE.N: Quote). A source told Reuters that Pfizer was leaning toward abandoning, not altering, the deal.
Allergan shares slumped nearly 15 percent, their biggest percentage drop in nearly 12 years, and were the worst performer on the S&P 500. Pfizer shares rose 2.1 percent.
The U.S. trade deficit widened more than expected in February in the latest indication that economic growth weakened further in the first quarter, although other data suggested the economic growth picture could improve in the months ahead.
"The mix of global growth being perhaps a bit slower and a more gradual path for the U.S. fed funds rate... are likely positive for the yen," said Brian Daingerfield, currency strategist for RBS Securities in Stamford, Connecticut.
The Dow Jones industrial average .DJI fell 133.68 points, or 0.75 percent, to 17,603.32, the S&P 500 .SPX lost 20.96 points, or 1.01 percent, to 2,045.17 and the Nasdaq Composite .IXIC dropped 47.86 points, or 0.98 percent, to 4,843.93. Continued...