The yen was around 0.1% stronger at 145.325 per dollar early in Asia following a 1% rally overnight against a broadly stronger dollar
The safe-haven Japanese yen and U.S. dollar remained firm on Wednesday while riskier currencies such as sterling and the Aussie dollar languished as investors ran for safety following the worst sell-off in nearly a month on Wall Street.
The catalyst was apparently some weak U.S. manufacturing data, which fanned worries about a hard landing for the economy, as traders prepared for key monthly payrolls data on Friday.
The yen was around 0.1% stronger at 145.325 per dollar early in Asia at 2249 GMT following a 1% rally overnight against a broadly stronger dollar.
The dollar was flat at $1.1046 per euro after adding 0.26% on Tuesday, and was steady at $1.3111 versus sterling after a 0.23% gain.
The Aussie was little changed at $0.67135 after Tuesday’s 1.2% decline.
Risks to the soft-landing scenario that had been gaining traction recently in markets saw traders raise odds of a 50bp Fed interest rate cut on September 18 to 38% from 30% a day earlier, as per the CME Group’s FedWatch Tool.
Markets are nervous ahead of Friday’s very important non-farm payroll report, which most market participants acknowledge will be a significant factor at the very least in whether the Federal Reserve cuts by 25 or 50, according to Gavin Friend, senior markets strategist at National Australia Bank.
All those asset moves point to a risk-off view and a bias for safe havens, with investors stepping back a bit, Friend added.
A gauge of U.S. manufacturing edged up last month from an eight-month low in July amid improvement in employment, but the overall trend continued to point to subdued factory activity, according to Tuesday’s data.
