The U.S currency extended declines versus the Japanese yen on Tuesday after a report showed sales of previously owned U.S. homes dropped more steeply than expected in July. The dollar also lost ground against the euro, with the single currency erasing earlier losses versus the greenback after the report.

Fears the U.S. and global economic recovery could falter have contributed to safe-haven flows into the yen, the U.S. dollar and government bonds as investors unload stocks and other assets perceived as risky. USD fell in Tuesday trading amid concerns over economic weakness and following the housing data. If risk-aversion flows accelerate into September, dollar/yen will continue to drift lower irrespective of any policy moves from Tokyo, analysts said.