Yen bid, dollar steadies as investors look for safety from global selloff

SINGAPORE: The yen regained its footing and the US dollar held steady against most of its biggest peers in early trading in Asia on Wednesday, as investors switched into safe havens after a days-long global selloff in stocks.

The yen advanced 0.1% after hitting a nine-month low against the dollar on Tuesday and was fetching 155.49 yen to the dollar.

The dollar index , which measures the greenback’s strength against a basket of six currencies, was flat at 99.594, close to a one-week high, as U.S. Treasury bonds drew bids.

Global equity markets have been hit hard this week, with the S&P 500 on a four-day losing streak on concerns about valuations of AI stocks and U.S. equity futures extending losses in Asian trading on Wednesday.

Adding to the sense of anxiety, initial jobless claims data released on Tuesday showed the number of Americans on jobless benefits surged between mid-September and mid-October.

“This was the first data release by the Department of Labor since the U.S. government shut down its federal operations on the first day of October, and it wasn’t great,” said Tony Sycamore, market analyst at IG in Sydney.

The “more important test” will come with the delayed release of Thursday’s non-farm payrolls release for September, he added.

Traders are inching up bets on monetary easing from the Federal Reserve at its next meeting, although there is still uncertainty given division within the central bank on whether to delay a rate cut.

Fed funds futures are pricing an implied 46.6% probability of a 25-basis-point cut at the December 10 meeting, compared to a 42.4% chance a day earlier, according to the CME Group’s FedWatch tool.

Richmond Federal Reserve President Thomas Barkin said on Tuesday he hopes and ongoing community interviews will help clarify where the economy is heading.

His colleagues are divided over whether to cut interest rates to protect the job market or leave them where they are to guard against higher inflation.

U.S. President Donald Trump renewed his attacks on Federal Reserve Chair Jerome Powell on Tuesday, saying “I’d love to get the guy currently in there out… but people are holding me back. Powell’s term as Fed chair is up in May.

Trump will meet the final shortlist of candidates for the next Fed chair after Thanksgiving and he could announce his pick before Christmas, U.S. Treasury Secretary Scott Bessent said on Tuesday.

Capital flows data from the Treasury department showed Japan’s holdings increased for a ninth straight month in September. Japan remained the largest non-U.S. holder of Treasuries with $1.189 trillion, its biggest holdings since August 2022.

The Australian dollar fetched $0.65085 , 0.1% weaker in early trade, after data showed wages rose at a steady pace in the third quarter. The kiwi slipped 0.2% to $0.5659 .

The euro stood at $1.1580 , little changed but trading near a one-week low of $1.1572 hit in U.S. trade.

Sterling was at $1.3148 , unchanged on the day.