LONDON, May 6 (Reuters) - The yen gained broadly on Wednesday, while the dollar edged up versus the euro, as nervousness ahead of U.S. stress test results on banks encouraged investors to pare back exposure to risk.
Concerns about these results, which are due on Thursday, were heightened after a source familiar with the tests said Bank of America required as much as $34 billion in additional capital.
This prompted investors to buy back the yen and the dollar -- which typically gain in times of heightened risk aversion -- after recent optimism that the global economy may be over the worst had led them to take on more risk.
The single currency pared some losses after a better-than-expected survey on the euro zone services sector, but wariness about event risks this week kept it in negative territory against both the U.S. and Japanese currencies.
As well as the stress tests, markets were cautious ahead of Thursday's policy decisions by the European Central Bank and the Bank of England and key U.S. jobs data on Friday.
Later on Wednesday, investors will be watching out for U.S. ADP unemployment data, which could provide some clues on how bad the state of the U.S. jobs market is.
"There is still some bullish news around and there have been some bright sparks recently, but people are wary that there could be things waiting around the corner to trip things up," CMC Markets analyst James Hughes said.
"The stress test results will be key as there is still a lot of underlying nervousness surrounding the banking sector," he added.
