The US dollar fell 0.27 per cent to 110.12 yen in early Tuesday trade — its lowest level since late August and extending a seven-day losing streak. The yen also hit a 16-month high against the British pound, trading at 139.90 yen.

US stocks plunged more than two per cent while oil prices sank more than six per cent in a holiday-shortened Monday trade, as developments in Washington added to investors' concern about a slowdown in the global economy next year.

"People are saying this is a black Christmas," said a veteran currency trader at a major Japanese bank.

Wall Street's volatility index, which measures implied volatility of stocks and is often seen as investors' fear gauge, jumped to 36.10, the highest since February 6, when it briefly shot up to as high as 50.30.

US President Donald Trump blasted the Federal Reserve yesterday, describing it as the "only problem" for the US economy, only days after reports surfaced that Trump had discussed firing Federal Reserve Chairman Jerome Powell.