Safe-Haven Yen Surges Amid Market Turmoil

The Japanese yen rose as traders sought safety amid market volatility prompted by weak U.S. manufacturing data. The dollar also drew safety bids, while riskier currencies like the Australian dollar and cryptocurrencies slipped. Investors are nervously awaiting crucial U.S. payroll data, potentially influencing Federal Reserve interest rate decisions.

The safe-haven Japanese yen rallied on Wednesday as traders sought refuge amid significant market volatility. Weak U.S. manufacturing data triggered the worst sell-off in nearly a month on Wall Street and sparked substantial losses for Asian stocks.

Kyle Rodda, senior financial market analyst at Capital.com, noted, 'Price action across global markets exhibits the hallmarks of an unfolding growth scare.' This concern was most evident in foreign exchange and commodity markets, with a nearly 5% overnight drop in crude oil prices.

The yen strengthened by as much as 0.4% against the dollar before settling up 0.1% due to a 1% overnight rally. Investors moved towards bonds, causing U.S. Treasury yields to drop nearly 7 basis points. Meanwhile, other major currencies and assets like the Australian dollar and cryptocurrencies faltered, increasing anxiety ahead of Friday's crucial U.S. payroll report.

(With inputs from agencies.)