The dollar and yen witnessed a jump against higher-yielding currencies on account of fears that China will undertake further measures to stabilize its economy, hampering the demand for higher-yielding assets.

The yen emerged stronger against the New Zealand dollar and South Korean won as people familiar with the matter said China's banks have begun restricting new loans.

The dollar was recently down at 89.50 yen from 90.24 yen late on Monday in New York, according to EBS. The euro was down at $1.4095 from $1.4162 and at 126.16 yen from 127.79 yen.

The pound hit the day's low of $1.6123 against the dollar after the Office for National Statistics revealed that gross domestic product grew by 0.1% in the three months to the end of December, in contrast with the previous quarter. Economists had speculated a rise of 0.4%.

Post the surprising 16.7% drop in U. S. existing home sales Monday, the Chinese news contributed to ponder over the global economic recovery and sent Asian stock markets reeling. The Nikkei Index in Japan slipped 1.8% while the Shanghai Composite Index tumbled 2.4%.

China's banks have reported to halt new lending since Jan. 19 across the country in a view to increase its reserves, Dong Tao, a Hong Kong-based economist at Credit Suisse Group AG revealed.