Japanese shares were the worst performers across Asia on Wednesday, with the Nikkei sliding to a one-month low as a sharply rising yen put brakes on a long rally and added to market nerves ahead of US inflation data.

The yen and stocks typically move in opposite directions, since a stronger yen can hurt exporters’ competitiveness and also make stocks more expensive for foreigners.

The yen rose about 0.7% to 139.46 per dollar on Wednesday, and it is up nearly 4% in four trading days as a lot of short positions have been reversed.

The Nikkei fell 1.3% to touch a one-month low of 31,791.71 in the morning session.

It was at 31,957.86 at the midday break, down 5.8% from the three-decade peak it hit last week. The broader Topix fell 0.6% to 2,223.55.

“Psychologically, the yen may be causing a little bit of nervousness,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore.

“The hardwiring for markets is the inverse relationship between the yen and Nikkei.”

The Nikkei’s sharp rally this year - up 22% versus world stocks’ 13% rise - has also drawn in a lot of foreign investors who might be holding back on adding to positions while the cost in dollar terms goes up, he added.

Markets are also on edge more broadly after a volatile end to last week that has investors nervously waiting on US CPI data that’s likely to set the direction for interest rates.

Losses were wide in Tokyo, though industrials and technology were the largest drag on the Nikkei.

Japan’s Nikkei pares most gains on sell-off to lock in profits

Pharmaceuticals maker Eisai was the top loser, down 3.8%, followed by semiconductor equipment maker Screen Holdings, falling 3.7%.

Chipmaker Tokyo Electron fell 3% to extend a recent pullback. Renesas Electron stock, which has doubled this year, dropped 2.8%.

Retailer Seven & I was the top gainer, up 2.5%.