05:07 AM EDT, 05/03/2024 (MT Newswires) -- The Japanese yen notched modest losses against all major currencies in early European trade on Friday while the US dollar also underperformed ahead of the latest US nonfarm payrolls and ISM Services PMI readings.

USD/JPY edged higher by 0.05% to 153.22, making it the worst performer in the G10 group, though the US dollar was also a close contender for the bottom rung after being quoted lower against all other major currencies except the yen.

"Fed Chair Jay Powell essentially ruling out rate hikes Wednesday has lifted financial market risk sentiment and is weighing on USD and Treasury yields," said Elias Haddad, a senior markets strategist at Brown Brothers Harriman.

Stocks were higher in Europe after softening in the Asia session. Government bond markets dipped as yields rose in a tentative indication of improved risk appetite among investors. Much still remains to be determined by Friday's US jobs report, however, although some analysts say the dollar is likely to be more sensitive to a negative surprise than a strong reading.

The forecast 238,000 April job gain - the highest since Oct. 7, 2022 - is likely to follow hard on the heels of March's 303,000 increase. That raises the bar for a positive surprise and leaves the balance of risk tilting to the downside for both the data and the dollar.

"Softer data prints will further undermine USD and bode well for risk assets. But more evidence of strong US labor demand and/or services sector growth can fuel an upswing in USD and Treasury yields," Brown Brothers Harriman's Haddad said.

The Bureau of Labor Statistics' nonfarm payrolls report, which is closely watched by the Fed, is due at 8:30 am ET.