Investing.com - The yen was higher against the dollar on Thursday as declines in Asian equities markets overnight spurred increased safe haven demand for the currency, while the euro was holding above recent lows ahead of the European Central Bank policy announcement later in the day.
USD/JPY hit lows of 108.56, before retracing some of those losses to trade at 108.77, down 0.10% for the day, off the previous sessions six year peaks of 110.07.
Investor sentiment was hit after a slew of disappointing manufacturing reports showed that factory activity in the U.S. slowed more than expected last month, Germany’s manufacturing sector slid into contraction territory for the first time in 14 months, while activity in China stalled.
Concerns over unrest in Hong Kong and a confirmed Ebola diagnosis in the U.S. also contributed to the risk-off mood.
EUR/USD was last up 0.16% to 1.2639, off Tuesday’s two-year trough of 1.2570.
The single currency remained under pressure after Wednesday’s weak German factory data added to concerns that the recovery in the region is faltering.
Earlier in the week, data showed that the annual rate of euro area inflation fell to a five year low of 0.3% in September.
The weak data added to pressure on the ECB to implement additional stimulus measures to stave off the threat of deflation in the region, ahead of its monthly meeting later Thursday.
Investors were also looking ahead to Friday’s U.S. nonfarm payrolls report, which was expected to show that the economy added more than 200,000 jobs for a sixth successive month in August.
A report by payroll processor ADP on Wednesday showed that the U.S. private sector added 213,000 jobs last month, slightly ahead of expectations for jobs growth of 210,000.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.15% to 85.87, off Tuesday’s peaks of 86.34, a high last seen in June 2010.