The dollar slumped more than 1% against the yen on Wednesday to its weakest level of the year after Kamala Harris put rival Donald Trump on the defensive in the only scheduled debate of the US presidential race.

Traders were also waiting nervously for a key US inflation report that could provide clues on how aggressively the Federal Reserve cuts rates next week.

The dollar dropped as much as 1.24% to 140.71 yen, a level not seen since December 28. The rand also strengthened against the dollar. It was last trading at R17.86/$, from R17.94 overnight.

The dollar index - which measures the currency against six major peers - slipped 0.33% to 101.31 after rising to a one-week top at 101.77 on Tuesday.

Vice President Harris, the Democratic candidate, put former President Trump on the defensive in a combative debate, with a stream of attacks on abortion limits, his fitness for office and his myriad legal woes.

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