The dollar tumbled more than 2 per cent versus the yen at one point and turned tail against other major peers in volatile trade on Wednesday, as Republican presidential candidate Donald Trump edged ahead of Democratic rival Hillary Clinton in a tight United States (US) election battle.
Trump held slight leads in the vital battleground states of Florida, Virginia and Ohio, clinging to a narrow advantage over Clinton in key states that could decide their race for the White House.
The dollar was down roughly 2.5pc at 102.430 yen in a volatile day that also saw it rise to 105.480 earlier.
The dollar fell 1.2pc against the Swiss franc, another safe-haven, at 0.9660 franc.
“The catalyst behind the dollar’s slide was reports that put Trump ahead of Clinton in the battleground state of Florida,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. “Risk aversion is in the air with equities tumbling.”
The Mexican peso was volatile, with US currency moving up 6.5pc to 19.49 pesos.
Recently, the peso had suffered deep losses when the likelihood of a Trump victory appeared high. Trump has pledged to renegotiate the North American Free Trade Agreement (NAFTA) with Mexico and Canada, a move that could damage the economies of the export-heavy nations.
Investor anxiety has deepened in recent weeks on the prospect of a Trump victory as the controversial businessman, an anti-establishment political novice, is seen as a risk to global growth as he has pledged to renegotiate trade deals, impose high import tariffs and stirred fears of a currency war with China.
The Republican candidate has also stoked uncertainty over his stance in foreign policy and immigration, while Clinton is seen as a safe pair of hands and a candidate of the status quo.
Both candidates scored victories in states where they were expected to win. Trump captured conservative states in the South and Midwest, while Clinton swept several states on the East Coast and Illinois in the Midwest.
But Trump’s slight edge in Florida, Virginia, North Carolina and Ohio gave him an early advantage in the state-by-state fight for 270 Electoral College votes needed to win.
The euro was up 1.3pc at $1.1163.
The Australian dollar, sensitive to shifts in risk appetite, fell 0.8pc to $0.7698.
See Reuters’ live election results.