USD/JPY Back Above 121 as China Jitters Grip Markets

The yen held onto hefty gains early on Thursday, having posted its biggest one-day rally against the greenback this year as investors unwound short positions amid a slump in global equities triggered by panic selling in Chinese stocks.

The dollar tumbled 1.5 percent on the yen on Wednesday, suffering its biggest drop since December. It fell as far as 120.410 yen, before steadying at 120.690.

The euro skidded to a six-week low of 133.315 yen, while the New Zealand dollar slumped to a 20-month trough of 80.62 yen. Both currencies have since recovered just a bit of ground to stand at 133.720 and 81.07 in early Asian trade.