In This Article:
* Yen, Swiss franc strengthen as investors flee stocks
* Euro hovers near the key psychological level of 1.14
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
By Vatsal Srivastava
SINGAPORE, Oct 25 (Reuters) - The Japanese yen rose against the dollar on Thursday as a rout on Wall Street and weak European and U.S. economic data dented global risk sentiment, sending investors scurrying to safe-haven assets including government bonds.
The yen, seen as a safety-bet during times of market turmoil and economic stress, advanced 0.35 percent at 111.87 on the dollar.
Over the past week, nervousness around U.S. corporate earnings and geopolitical uncertainty added to heightened worries about global growth, Italy's free spending budget and Sino-U.S. trade tensions.
On Wall Street, the S&P 500 declined for a sixth day in a row as weak forecasts from chipmakers added to concerns about the impact on earnings from tariffs and a slowdown in China's economy.
Also dampening sentiment, sales of new U.S. single-family homes fell to a near two-year low in September, the latest sign that rising mortgage rates and higher prices were hurting demand for housing.
The grim U.S. session rippled through to Asia with stock markets from Japan to Australia sinking deep into the red.
"I won't be surprised to see the dollar/yen fall below 112 as U.S. yields have cooled off to 3.1 percent from their recent peak and volatility in developed markets has picked up," said Rodrigo Cartel, senior currency strategist at NAB.
The dollar, also considered a safe-haven, was on reasonably solid ground against most of its other major rivals.
An index measuring the U.S. currency's value versus six major peers was only a touch lower in Asia at 96.35, after gaining an impressive 0.5 percent on Wednesday
The euro remained tentative, after giving up almost 0.7 percent on Wednesday - its steepest fall in percentage terms since Sept. 27 on concerns over the pace of economic growth in Europe.
Euro zone business growth slowed more than expected this month, a widely watched Purchasing Managers Index (PMI) survey showed on Wednesday. German private-sector growth fell to its lowest in more than three years, and manufacturing in France hit a 25-month low, according to other surveys.
The European Central Bank (ECB)holds its monetary policy meeting later today, and investors will be looking for any new guidance from the ECB acknowledging the recent slowdown in growth as well as the political stand-off between Brussels and Rome over Italy's free spending budget.
"Euro has limited upside given risk factors such as the Italian budget, brexit and more recently the softening economic activity," said Catril.