The US dollar fell below 116 yen in volatile European trade yesterday, as the Japanese currency took on the unfamiliar role of a safe-haven currency. Uncertainties over the future of European economic and monetary union (EMU) resulted in strengthening not only of the yen, but also the dollar against other major currencies, sterling and the Swiss franc. Dealers said rumours of a one-year delay to EMU were filtering through the market, after the election victory of the French Socialist Party which favours wider EMU membership, and a softer entry criteria. The mighty deutschemark suffered most. 'I don't think there is any currency in the world that has not gone up against the mark,' Peter von Maydell, economist at Union Bank of Switzerland, said. In Europe, the dollar fell to 115.82 yen, from 116.55 yen the previous day. Later in New York, the greenback managed to regain some ground, reaching 116.03 yen. The dollar was at 1.726 marks in New York, compared with 1.733 on Monday. Pressure on the mark intensified in New York after it emerged that Chancellor Helmut Kohl's coalition had abandoned plans to revalue Germany's gold reserves. The abandonment of the proposal, which could have been used to reduce Bonn's large current account deficit, means Germany also faces difficulties meeting the EMU criteria. 'The French election has resulted in dollar buying, sterling buying, and even yen buying,' Neil Mackinnon, chief economist at Citibank, said. 'The sentiment is to go back into currencies which are outside the euro issue,' Jeremy Stretch, currency strategist at NatWest Markets, said. The French franc yesterday dropped to its lowest point this year against the mark to 3.386. Mr Mackinnon said the yen's strengthening against the dollar could also be attributed to the growing likelihood of Japanese interest rates being raised in the third quarter. Earlier in the day, Japanese officials were rumoured to have said that the yen should strengthen to 103 yen to the dollar. This was later denied. Mr Mackinnon said Japan did in fact want a stronger yen to prevent a further widening of its trade surplus with the US.