Yen slips from 7-month high as dollar steadies amid market calm

The dollar, on Wednesday, remained stable, pulling the yen away from a seven-month peak as currency markets calmed after a turbulent start to the week. The yen fell by 1 percent to 146.43 per dollar in early trading, retreating from Monday's high of 141.675, yet still up 3 percent in August and significantly higher than the 38-year low of 161.96 seen in early July.

The yen's recovery has been driven by timely interventions from Tokyo in early July and a recent hawkish shift by the Bank of Japan, prompting investors to unwind popular carry trades. Market volatility was further intensified by a softer-than-expected US jobs report on Friday and disappointing earnings from major tech firms, which led to a global sell-off in riskier assets amid recession fears.

Meanwhile, the euro remained steady at $1.092675, and sterling traded at $1.26985, close to a five-week low. The U.S. dollar index eased to 102.94, recovering from Monday's seven-month low of 102.15.

Following the weak jobs report, traders adjusted their expectations for the Federal Reserve, anticipating significant rate cuts by year-end. Markets priced a 70 percent chance of a 50 bps cut in September, down from 85 percent the previous day. However, some analysts expect the Fed to proceed cautiously, needing confirmation from multiple data points before making decisions.