FXstreet.com (Barcelona) - Stock markets in Europe have opened with declines following declines in Asian Markets and Wall Street as risk aversion swept over markets after Obama released his bank plan and concerns about overheating Chinese economy. Investors have flocked to Yen which acted as safe haven.

Eurostoxx Index trades 0.3% down while German DAX Index and French CAC index dips 0.15%. In the UK, the FTSE Index trades practically flat. Markets in Asia have plunged, with Japanese Nikkei Index 3.6% down and Hong Kong's Hang Seng Index 2% down, and Wall Street closed on Thursday with declines between 1% and 2%.

US president Barack Obama spooked markets yesterday announcing a big set of regulations for financial institutions, introducing limits on financial risk-taking as well as in banks size, in order to avoid too big to fail investment institutions. Likewise Banks will be banned from investing in, owning or sponsoring a hedge fund or private equity fund.

Besides, Chinese economy returned to growth levels above 10% in the fourth quarter which arose concerns about about risks of overheating and creation of market bubbles on one of the largest economies of the world, which would have serious consequences for teh global economic recovery.

Yen soars to multi-month highs on risk aversion

The Yen soared across the board on Thtursday, and USD/JPY plunged from 92.90 to a fresh at fresh 4-week low at 89.75 during Asian session, to return to levels above 90.00.

EUR/JPY decline from 133.60 area on Jan 11 extended on Thursday, with the pair plunging 300 pips to a 9-month low at 126.50 area,and GBP/JPY dropping 350 pips to one month low at 145.45.

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