TOKYO (Reuters) -The safe-haven Japanese yen and Swiss franc traded near multi-month highs against the dollar on Friday after an unexpected slump in U.S. manufacturing fuelled fears of a downturn, sending stocks and bond yields tumbling.

Sterling stumbled to a fresh one-month low following a nearly 1% plunge overnight as the Bank of England kicked off its interest-rate cutting cycle in a finely balanced decision. The euro languished close to a one-month trough following dovish comments from a European Central Bank official.

The yen was steady at 149.49 per dollar as of 0400 GMT, after strengthening as far as 148.51 overnight for the first time since mid-March. The franc gained about 0.1% to 0.87225 per dollar, and earlier reached its highest since early February at 0.8722.

They were the only two major currencies to outperform the dollar overnight, which itself draws safe-haven flows, paradoxically even when the United States is the cause for concern.

Megacaps led a Wall Street selloff on Thursday that reverberated in Asia, with Japan's Nikkei plunging as much as 5.3%, South Korea's Kospi tumbling 3.3% and Hong Kong's Hang Seng dropping 2%.

U.S. 10-year Treasury yields plunged as much as 14 basis points to 3.965% overnight, breaching the psychological 4% barrier for the first time in six months, and extended those declines in Asia to a low as 3.944%.

Following the dour manufacturing numbers, traders now see 27.5% odds that the Federal Reserve will cut interest rates by 50 basis on Sept. 18, up from 12% odds a day earlier, according to the CME Group's FedWatch tool. Markets imply 86 bps of cuts over the three remaining meetings this year.

The U.S. economic outlook faces a crucial test later Friday, with the release of monthly payroll figures.

"Rate cut pricing seems a little excessive," said Shinichiro Kadota, a currency and rates strategist at Barclays in Tokyo, who forecasts two 25 bps cuts in 2024.

"The risk, if anything, is that the U.S. data starts to stabilise, or sentiment starts to stabilise, and those cuts get priced out, which should lead to some recovery in the dollar."

Meanwhile, sterling slipped 0.11% to $1.2721, and earlier dipped as low as $1.2713 for the first time since July 3.

BoE Governor Andrew Bailey led a 5-4 decision to reduce rates by a quarter-point to 5%, and said the central bank would move cautiously going forward.

"If you look at the headlines that Bailey produced: caution on cutting too quickly or by too much, it implies to me that they're looking at a steady quarterly pace of reductions," said Colin Asher, an economist at Mizuho, predicting the next cut in November.

"I think you might be able to term this a hawkish cut," Asher added. "Generally speaking, I would expect sterling to gradually strengthen."

The euro was flat at $1.0793, after reaching a three-week low of $1.07775 overnight.

ECB policymaker Yannis Stournaras raised the risk of a weak euro zone economy sending inflation below the 2% target in an interview published on Thursday, reaffirming his expectation for two rate cuts this year.