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Dollar hit four months low against the yen as chaos angels Washington By Reuters

© Reuters. Illustrative image of US Dollar and Japan Yen notes

By Hideyuki Sano

TOKYO (Reuters) – The dollar fell to four-month decline against the yen Tuesday, when investors cut exposure to risky assets when Washington struggled with a partial government closure and open confrontation between the White House and the central bank.

The dollar fell 0.27 percent to 110.12 yen in early Tuesday trading ̵[ads1]1; its lowest level since late August and prolonged a seven-day tapestry. The yen also hit a 16-month high against the British pound, which traded at 139.90 yen ().

U.S. The shares went more than two percent, while oil prices dropped more than six percent in a holiday-shortened Monday trade, as developments in Washington increased to investor's concern for a downturn in the global economy next year.

"People say this is a black Christmas," said a veteran currency trading on a large Japanese bank.

Wall Street's volatility index (), which measures the implicit stock volatility and often seen as the investor's fear gauge, jumped to 36.10, highest since February .6, when it was up to as high as 50.30.

US President Donald Trump blew the Federal Reserve on Monday and described it as the only problem for the US economy, just days after reports discovered that Trump had discussed shooting the Federal Reserve mayor Jerome Powell.

"If talk of shooting Powell becomes more realistic, that would undermine Fed's independence as a central bank and ultimately trust the dollar," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank

. As a stock market increase, US Treasury Secretary Steven Mnuchin hosted a ring with the president's Financial Markets Working Group, a body known as the "Tire Protection Team".

But keeping such a meeting, usually only called in times of great volatility, did little to reassure the market. Some said that the move may have relapsed by harming the investor's feelings.

Trump also saves with Democrats in Congress about the partial closure of the US government on Monday, with no evidence of concrete efforts to reopen agencies.

Washington's latest issues come at the heels of a major global stockpile since the beginning of October on tensions in China and the United States, higher US interest rates and a slowdown in Trump's tax cuts to the US economy.

With many markets closed for Christmas, other currencies were barely traded on Tuesday. The euro was slightly changed to $ 1.1410 (), after receiving 0.33 percent on Monday.

Securities, such as Swiss francs and gold, were supported, even though they have not been traded on Tuesday.

The Swiss franc rose 0.9 per cent on Monday, the largest daily gain for 11 months to francs 0.8585 per dollar edged near 2 1/2 months high at 0.9841 affected last Thursday.

The franc achieved 0.4 percent against the euro to 1.1260 to the euro ().

Gold rose to a six-month high of $ 1,269.30 per ounce on Monday.

The product margins faced new pressure while oil prices tumbled more than 6 percent on Monday.

The Canadian dollar traded at $ 1.3600 per dollar after hitting a 19-month low at C $ 1,3614 on Monday.

The Australian dollar raised $ 0.7053 near the year's low of $ 0.7021 set at the end of October.

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