The Yen rose across the board on Thursday as investors reduced demand for riskier assets such as stocks after a series of weak US economic data added to anxiety over the country's growth picture. Analysts said that while market indicators pointed to the Federal Reserve being close to the end of its interest rate cutting cycle, there were nagging doubts on whether the economy would be able to cope without further policy easing.

UsdJpy drop as low as 104.43 and was last trading at 104.73 down 0.42% yesterday. EurJpy fell 0.46% to 161.91 while GbpJpy dropped 0.36% to 203.97. The low-yielding yen tends to attract flows during periods of uncertainty as the low interest rates reflect Japan's capital surplus. Analysts also attributed the Yen's advance to a reversal of the previous session's decline and the Dollar's failure to break through the 105.20 mark against the Japanese currency. EurUsd was last down 0.05% at 1.5459 after hitting a session 1.5547 high.

Factory activity in the US mid-Atlantic region shrank for a sixth straight month in May, while manufacturing in New York State also declined, according to reports by regional Federal Reserve banks. US interest rate futures continued to signal the expectation the Fed would raise the benchmark federal funds rate by 25bp by the end of the year to 2.25%. They were pricing in a 92% chance that the central bank would leave rates steady in June.

Yesterday Euro has some support as data showed strong Q1 growth in France and Germany. But the market's enthusiasm was dampened by European Central Bank chief Jean-Claude Trichet's warning that the pace might not be as flattering in the months ahead. The ECB's refinancing rate is at 4% and the interest rate differential between the euro zone and the United States has been the main driver behind the Dollar's decline.