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Previous session overview The euro and dollar fell to fresh seven-week lows against the yen in Asia Wednesday as investors wary of further falls in global share prices bought the safe-haven Japanese unit. In morning trade, Japanese institutional investors reacted to an overnight slide in the Dow Jones Industrial Average, which closed down 2.0%, by selling risk-sensitive currencies like the euro for the yen. That drove the euro to JPY 131.47, its lowest level since July 15. The selling also weighed on the dollar, which fell to JPY92.51, its lowest since July 13. The Euro bank rumors swirled in New York and the market tumbled from the relatively high levels of the recent range to test support at USD1.4200. EURJPY is poised at key levels and could pull the major lower although a break of the lower end of the range is also unlikely with solid support expected from USD1.4000-1.4100. The British pound weakened against the euro and dollar after a surprisingly weak reading of UK manufacturing and lending. British manufacturing activity fell to 49.7 in August, lower than forecasts at 51.5. The Australian dollar was weaker late Wednesday due to a fall in equity and commodity prices, which have failed to continue their recent rallies. But stronger-than-expected Australian economic data and resurgent expectations for tighter monetary policy supported the currency throughout the day and resistance levels are expected to remain intact heading into the offshore session. Market expectation Dealers expect the yen to continue benefiting for the rest of the week amid growing concern that any more pullback in equities could be a further drag on a global economic recovery. Release of stronger than forecast Australian GDP data provided a boost for risk, the recovery in Aussie-yen lifting euro-yen and in turn allowed euro-dollar to edge back above USD1.42 to retest earlier opening highs ahead of the European open. Further demand extended the recovery to USD1.4227, with rate currently holding around USD1.4220. Offers now seen placed from around USD1.4240 with interest extending to USD1.4255. Support seen placed around the overnight low at USD1.4190, with further interest extending to the NY low at USD1.4177 with that continued talk of sovereign demand in this area. Strong demand for sterling-yen lifted cable off lows, the rate pushing up to USD1.6180 ahead of the European open, with continued demand into early Europe extending the move to USD1.6193 (USD1.6191 50% USD1.6268/1.6113). Rate currently trades around USD1.6180. Offers seen placed between USD1.6190/00, a break to open a move toward USD1.6205/15 with stops placed on a break of USD1.6220. Support now seen placed at USD1.6135/30 ahead of USD1.6115/00. European stocks are expected to open modestly lower Wednesday, weighed down by negative sessions on Wall Street and in Asia, as investors question the sustainability of the summer rally and book profits on concerns that the equity markets have moved too far ahead. Ahead of the U.S. jobs data later in the day, traders said players were anxious about any negative surprises. The August employment report by payroll giant Automatic Data Processing is due at 1215 GMT. Economists surveyed forecast the data to show 213,000 jobs lost in the month, compared to July’s contraction of 371,000.