By Hiroyuki Kachi 
 

TOKYO--The yen was sharply higher against its rival currencies in Asian trade Friday, as a steep decline in the Nikkei Stock Average worsened market sentiment, prompting a flight to the perceived safety of the Japanese currency.

Around 0450 GMT, the greenback was at Y119.26, after falling to as low as Y119.10 in the early afternoon compared with Y120.09 late Thursday in New York.

Yen buying gained traction in afternoon trade, as the benchmark stock average extended earlier losses. The Nikkei index was down 2.6% midday.

The stock market slide comes as investors remain reluctant to take new positions ahead of closely watched U.S. jobs data for August, due later Friday. The data is expected to give more clues as to whether the Federal Reserve may raise interest rates later this month or wait longer to act. Investors were also keeping eyes on how Shanghai stocks will reopen Monday after China's two-day holiday .

"The stock market (weakness) has triggered (the yen buying)," said Akira Moroga, manager of forex products group at Aozora Bank. "There still remain concerns among investors about the performance of China stocks," said Mr. Moroga.

The Japanese currency was also higher against the euro, which dropped to Y132.62, its lowest since April 30, before stabilizing at Y132.78 midday compared with Y133.59 late Thursday.

The euro was already tracking overnight weakness after European Central Bank President Mario Draghi signaled a firm commitment to monetary stimulus to support a flagging economic outlook.

Currencies linked to commodities and resources exporters were weaker against the yen. The Australian dollar tumbled to Y83.15 midday from Y84.25, while the New Zealand dollar slipped to Y75.88 from Y76.84.

The dollar was slightly higher against the euro, which was at $1.1135 midday from $1.1123.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.05% at 88.76.

The U.S. jobs data is expected to show an addition of 220,000 jobs, according to economists surveyed by The Wall Street Journal. The unemployment rate is forecast to tick down to 5.2% from 5.3%.

J.P. Morgan said in a morning note that the possibility is high for the dollar "to continue to lack moving initiative of its own for a while," even after the jobs data. Noting that the Fed's decision to raise rates later this month largely depends on market trends, oil prices and the dollar movement, "it's very unlikely that jobs data alone can lead to a conclusion," about raising rates, said J.P. Morgan.

 
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           119.28-29      120.07-08  -0.66   120.20   119.12  -0.37 
EUR/USD Euro            1.1134-37      1.1122-25  +0.11   1.1141   1.1117  -7.96 
GBP/USD U.K.            1.5232-34      1.5257-59  -0.16   1.5260   1.5227  -2.22 
USD/CHF Switzerland     0.9712-16      0.9730-34  -0.18   0.9746   0.9699  -2.30 
USD/CAD Canada          1.3218-23      1.3175-80  +0.33   1.3226   1.3179 +13.76 
AUD/USD Australia       0.6970-74      0.7015-19  -0.64   0.7023   0.6959 -14.67 
NZD/USD New Zealand     0.6361-67     0.6396-402  -0.55   0.6402   0.6351 -18.36 
 
Euro Rate 
 
EUR/JPY Japan           132.80-84      133.53-57  -0.55   133.68   132.61  -8.36 
 
Source: Tullett Prebon 
 

Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com

(END) Dow Jones Newswires

September 04, 2015 01:45 ET (05:45 GMT)