LONDON, June 23 (Reuters) - The yen rose broadly on Tuesday, hitting a one-month high against the euro and a three-week high against the dollar, benefiting from creeping doubts about the sustainability of any economic recovery.
Concerns about reserve diversification away from U.S. assets caused the dollar to turn lower against the euro after Moody's said one risk to the U.S.' triple-A rating is if the dollar is challenged as the main reserve currency.
The ratings agency said the U.S. rating is safe unless the government is unable to bring debt back down. See [ID:nT102997].
Investors were also cautious ahead of a U.S. Federal Reserve policy decision on Wednesday and this week's record $104 billion sale of U.S. debt.
Stockholm-based SEB currency strategist Johan Javeus said any gains in the dollar would be limited given the risks going into the U.S. auctions.
"People are wary of buying dollars until the U.S. bond auctions are out of the way," he said.
This has meant that renewed concerns about the global economy have fed through more into a stronger yen than a stronger dollar, he said, emphasised by details on Monday of cuts in the World Bank's forecasts for most economies.
"The World Bank report sparked a sell-off in risky assets and the yen is first and foremost the currency to gain from this," Javeus said.
At 0825 GMT, the dollar fell 1 percent to 95.01 yen JPY=, close to a three-week low just below 95 yen.
