Safe-haven yen rallies, Aussie sinks as U.S. payrolls test approaches

Global financial markets shifted into risk-off mode as the Japanese yen gained strength and risk-sensitive currencies like the Australian dollar and British sterling weakened. These movements followed a sharp sell-off in U.S. equities, driven by weaker-than-expected manufacturing data. The soft figures heightened concerns about the U.S. economy’s ability to achieve a soft landing, with upcoming payroll data adding further uncertainty.

By early Asian trading hours, the yen had strengthened, continuing its upward trend from the previous session when it rallied. The currency’s performance was supported by a decline in U.S. Treasury yields, as investors sought the relative safety of bonds.

Read more to find out why yen strengthened.