SINGAPORE, Aug 5 Reuters Japan39;s yen hit its highest levels against the dollar since January on Monday, as markets extended moves triggered last week by weak U.S. labour data that stoked recession worries and expectations of deeper rate cuts by the Federal Reserve.

Friday39;s jobs data, coming on top of a string of weak earnings reports from large technology firms and heightened concerns over the Chinese economy, drove a global selloff in stock markets, oil and highyielding currencies as investors sought the safety of cash.

The selling continued on Monday, with U.S. Treasury yields falling further, stock indexes in the red, bitcoin dumped and the dollar losing ground, mainly to the yen.

The carryfunding favourite, the yen , strengthened as much as 3.4 to 141.675 per dollar at one point, before easing to 143.165. The currency was trading near its strongest level since early January.

The dollar dropped 0.5 against major currencies to trade at 102.62 a near fivemonth low.

Fears of a U.S. recession mean that the market is no longer looking for an orderly adjustment in Fed policy towards some kind of neutral rate say near 3.25. No, the fear of a recession is now bringing in the idea of stimulative monetary policy, noted Chris Turner, head of FX strategy at ING.

It is no surprise to see lowyielding currencies now in the ascendancy as the rest of the world now starts to converge on their low interest rates.

The yen has jumped 14 against the dollar over the past…