The Japanese yen and the Swiss franc firmed against the dollar on Wednesday as investors scurried to safer assets after a sharp selloff on Wall Street in the prior session sparked by concerns about the U.S. economy and tech sector valuations.

The catalyst was ostensibly some soft U.S. manufacturing data, which fanned worries about a hard landing for the world's biggest economy, with traders already nervous ahead of crucial monthly payrolls data on Friday.

U.S. equity indexes slid on Tuesday, with AI chip giant Nvidia tumbling nearly 10%. The risk-off mood spilled over to Asia and Europe on Wednesday.

"It's a bit reminiscent of the early August selloff where you didn't really need a catalyst. It's just that you're at the highs in risky assets," said Alex Jekov, head of G10 FX strategy at BNP Paribas.

"The dollar is softer versus low-yielding currencies because they are getting a bid from the risk-off environment. But what is different from August is that U.S. rates aren't participating quite as much. It seems to be mainly an equities story."

The yen strengthened as much as 0.4% to 144.89 per dollar before last trading up about 0.2% at 145.195 as of 0902 GMT, following a 1% rally overnight.

Dollar/yen hit a multi-month low of 141.68 on August 5 after a surprisingly weak U.S. payrolls data and an interest rate hike from the Bank of Japan triggered a massive unwind of yen-funded carry trades.

JOBS FOCUS

Risks to the U.S. soft-landing scenario - which had been gaining traction recently in markets - saw traders raise the chances of a 50-basis point Federal Reserve interest rate cut this month to 37% from 30% a day earlier, according to the CME Group's FedWatch Tool.

Economists surveyed by Reuters expect Friday's report to show an increase of 165,000 U.S. jobs in August, up from a rise of 114,000 in July.

Ahead of that, investors will keep a close eye on job openings data on Wednesday and jobless claims on Thursday.

U.S. markets were closed for the Labor Day holiday on Monday and came back Tuesday to a weak Institute for Supply Management survey that suggested factory activity in the country would remain subdued for a while.

"That was supposed to show a gain, but actually showed a decline, and has made people wonder once more about the Fed possibly being too late to act," said Sam Stovall, chief investment strategist at CFRA.

The Swiss franc, another safe haven, strengthened about 0.2% to 0.8487 per dollar.

The euro was flat at $1.10525, recovering from marginal declines earlier in the session.

Euro zone business activity received a boost from France hosting the Olympic Games last month but the malaise in the bloc is likely to return once the Paralympics wraps up as demand remains weak, a survey showed.

Sterling was flat at $1.3117, after weakening 0.23% overnight, while the Aussie slipped a further 0.1% to $0.67035, extending Tuesday's 1.2% tumble.

Cryptocurrencies also faltered, with bitcoin and ether slipping about 2.4% each.

(Reporting by Kevin Buckland and Sruthi Shankar; Editing by Sonali Paul, Shri Navaratnam, Muralikumar Anantharaman and Christina Fincher)