The yen strengthened on Wednesday while the U.S. dollar held firm against major currencies in early Asian trading. Investors moved toward safe-haven assets following several days of global stock market declines.
The yen rose 0.1% after touching a nine-month low on Tuesday, trading at 155.49 per dollar.
The U.S. Dollar Index was steady at 99.594, near a one-week high, supported by renewed demand for U.S. Treasury bonds.
Global equity markets have struggled this week. The S&P 500 has now fallen for four consecutive sessions amid concerns about stretched valuations in AI-related stocks. U.S. equity futures also extended losses during Asian hours.
Adding to investor concern, Tuesday’s initial jobless claims report showed a sharp increase in Americans receiving unemployment benefits between mid-September and mid-October.
“This was the first release from the Department of Labor since the shutdown began in early October, and it wasn’t great,” said Tony Sycamore, market analyst at IG in Sydney. He added that the “more important test” will come with Thursday’s delayed September non-farm payrolls report.
Markets weigh Fed outlook as uncertainty grows
Traders are gradually increasing their expectations of monetary easing at the Federal Reserve’s next meeting. Still, uncertainty remains due to divisions among Fed officials over whether to cut rates or keep them steady.
According to CME FedWatch, markets now price a 46.6% chance of a 25 bps rate cut at the December 10 meeting, up from 42.4% the previous day.
Richmond Fed President Thomas Barkin said he hopes upcoming data will clarify the economy’s direction. Fed officials remain split between supporting the job market with lower rates or keeping rates unchanged to limit inflation risks.
U.S. President Donald Trump renewed his criticism of Fed Chair Jerome Powell, saying he would like to replace him but has been advised against acting immediately. Powell’s term ends in May.
Treasury Secretary Scott Bessent said Trump will meet the final shortlist of candidates for the next Fed chair after Thanksgiving, with a possible announcement before Christmas.
Treasury data showed that Japan increased its U.S. Treasury holdings for the ninth straight month in September, reaching $1.189 trillion, the country’s highest level since August 2022.
Currency moves across Asia and Europe
The Australian dollar slipped 0.1% to $0.65085 after wage data showed steady growth in the third quarter.
The New Zealand dollar weakened 0.2% to $0.5659.
The euro traded at $1.1580, near its one-week low of $1.1572.
Sterling held steady at $1.3148.
