TOKYO - The dollar recovered some losses against major peers Thursday after a steep dive in US trading sparked by renewed concerns about the world's top economy.

But emerging market currencies kicked higher, with the oil-linked Malaysian ringgit soaring nearly two percent as crude prices rebounded.

Dollar selling hit fever pitch in New York as a weak US service sector report -- and a global growth warning by a top Federal Reserve official -- threw into question the timeline for more Federal Reserve interest rate hikes this year. It hiked them in December for the first time in more than nine years.

Higher rates tend to stoke dollar buying.

"Presumably investors are betting that lingering risk-off (sentiment) will stay Fed's hand when it comes to further tightening," Valentin Marinov, a currency strategist at Credit Agricole, told Bloomberg News.

In Tokyo, the dollar fetched 117.90 yen, slightly up from 117.81 yen in New York, while the British pound bought $1.4587, slipping from $1.4601. However, on Tuesday the greenback was at 120 yen and the pound bought $1.4415.

"The dollar-yen has gone back to where it was before the Bank of Japan's additional easing," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management.

The BoJ shocked investors last week and sent the yen tumbling after announcing it would adopt a negative interest rate policy, stoking a brief global equities rally.

That step, an add-on to existing massive stimulus measures, means effectively charging commercial lenders to park new deposits at the central bank -- a move aimed at ramping up lending to people and businesses in order to kickstart the economy.

The euro ticked down to $1.1085 from $1.1111 in US trade but remains well up from the $1.0917 seen Tuesday. It also weakened to 130.81 yen from 130.90 yen.

The single currency has benefited from upbeat eurozone economy data, with a promising rise in retail sales for December.

Emerging currencies were broadly higher against the dollar, with the ringgit soaring 1.7 percent and the South Korean won jumping 1.5 percent.

The Taiwan dollar, Thai baht, Philippine peso and Indian rupee also enjoyed healthy gains.