The dollar continued to weaken against the yen on Thursday in the wake of minutes from the last U.S. Federal Reserve meeting,
while global equity markets declined on global growth concerns.
Investors were set to monitor an appearance by Janet Yellen on Thursday at 5:30 p.m. EDT (2130 GMT) in a conversation with former Federal Reserve chairmen. On Wednesday, meeting minutes indicated the Fed is unlikely to raise interest rates before June, as a number of policymakers argued headwinds to growth would probably persist.
A cautious Fed and concerns about global growth have, in turn, sent the dollar to a fresh 17-month low of 107.84 against the yen. The dollar was last down 1.6 percent to 108.01. The decline put the greenback's losses at more than 10 percent so far this year.
The surge of money into the perceived safety of the Japanese currency reflects the scale of concern over global growth that has again stayed the Fed's hand.
That concern also sent equities lower, with the telecom sector pacing declines on Wall Street, while the pan-European FTSEurofirst 300 share index was on track for its fourth straight week of declines.
Investors have been trying to reconcile conflicting statements from U.S. Federal Reserve officials in recent weeks since the central bank issued its policy statement on March 16.
"The Fed continues to impact equity prices," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
"Perhaps what is most telling is the message oscillation, between dovish and hawkish comments from Fed officials in recent days, continues to weigh on sentiment."
The Dow Jones industrial average fell 144.78 points, or 0.82 percent, to 17,571.27, the S&P 500 lost 17.45 points, or 0.84 percent, to 2,049.21 and the Nasdaq Composite dropped 56.24 points, or 1.14 percent, to 4,864.47.
U.S. investors were also awaiting the start of quarterly earnings season next week for signs of growth, with a host of large banks scheduled to post results.
MSCI's index of world shares , fell 0.57 percent. The FTSEurofirst 300 was down 0.86 percent.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.05 percent at 94.382.
The U.S. dollar rally that began in mid-2014 has nearly run its course and will only gain slightly over the coming year, according to a Reuters poll of strategists who said risks to their forecasts are tilted more to the downside.
The concerns over debt and growth-related risks to companies worldwide, particularly in developing economies, were also visible in minutes of the European Central Bank's March policy meeting.
The lower dollar and growth concerns boosted demand for safe-haven assets such as gold and U.S. Treasuries.
Gold XAU= was up 1.5 percent at $1,239.56 and ounce after hitting a two-week high of $1.243.50.
U.S. Treasury yields fell broadly on Thursday to their lowest levels since late February. Benchmark 10-year Treasuries US10YT=RR rose 15/32 in price to yield 1.7027 percent after hitting a low of 1.696 percent.
Oil prices also declined after industry data suggested a key pipeline shutdown had not reduced crude flows to the U.S. storage base by as much as expected.
U.S. Crude CLc1 was last off 2.1 percent to $36.96 a barrel while Brent fell 2.6 percent to $38.81 a barrel.