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The dollar fell 1.4 percent to hit a session low of 100.965 yen, taking it closer to last week's trough of 100.59 yen.
Traders said weak equity markets encouraged investors to buy the yen, which is seen as a safe haven and usually gains when risky assets like equities fall. European equities were last down more than 1.5 percent.
The euro rose 0.8 percent to hit the day's high of $1.29775, extending gains after stop loss buy orders were triggered earlier on the break above $1.2910, traders said.
Analysts said the euro was helped as data showed a rise in regional German inflation which dampened concerns about euro zone monetary policy easing.