Yen and dollar firm, safe haven with markets on edge ahead of US payrolls test By Reuters

By Kevin Buckland

TOKYO (Reuters) – The Japanese yen and the U.S. dollar held steady on Wednesday, while riskier currencies such as the pound and the greenback remained safe as investors fled for safety after the biggest sell-off in nearly a month on wall street.

The catalyst was apparently some weak US manufacturing data that fueled concerns of a hard landing for the economy as traders braced for crucial monthly payrolls data on Friday.

The yen was about 0.1 percent stronger at 145.325 per dollar in early Asian day (2249 GMT), after rising 1 percent overnight against a broadly stronger dollar.

The US currency was flat at $1.1046 per euro after gaining 0.26% on Tuesday and was flat at $1.3111 against the pound after a 0.23% gain.

The Aussie was little changed at $0.67135 after falling 1.2% on Tuesday.

Risks related to the soft landing scenario, which has gained momentum in the markets recently, have seen traders raise the odds of a 50 basis point (bp) Federal Reserve interest rate cut on September 18 to 38%, from 30% a day earlier, according to CME. The group’s (NASDAQ: ) FedWatch tool.

“Markets are jittery ahead of Friday’s all-important non-farm payrolls report, … which most market participants acknowledge will be a significant factor at least in whether the Fed cuts by 25 or 50,” a said Gavin Friend, senior markets strategist. at National Australia Bank (OTC:).

“All these asset movements point to a risk reduction view and a bias towards safe havens, (with investors) pulling back a bit.”

A gauge of U.S. manufacturing rose last month from an eight-month low in July amid improving employment, but the overall trend continued to point to subdued factory activity, data showed on Tuesday.

Economists polled by Reuters expected Friday’s report to show an increase of 165,000 U.S. jobs in August, compared with an increase of 114,000 in July.

Before that, Wednesday’s job openings data and Thursday’s jobless claims report will be in focus.