FOREX-Yen slides broadly on BOJ easing bets, euro flat
* Yen hits four-month high vs dollar on BOJ easing bets
* Euro adds to Wednesday's gains on Draghi comments
* Sterling outperforms on strong UK GDP data
By Julie Haviv
NEW YORK, Oct 25 (Reuters) - The dollar rallied to a four-month high against the yen on Thursday as a n array of U.S. data and ex pectations the Bank of Japan will ease monetary policy next week fav ored the greenback.
The greenback has gained 3 percent against the yen so far in October, largely a result of expectations that the Bank of Japan will take action on Oct. 30 to stimulate the Japanese economy.
A string of U.S. data mostly favored the dollar by highlighting an economic disparity between the U.S. versus Japan and the euro zone.
A gauge of planned U.S. business spending was flat in September w hile new orders for long-lasting manufactured goods increased during the month. [ ID:nL 1 E8LO749]
Other data showed a decrease in the number of Americans filing new claims for unemployment benefits last week, giving a clearer sign that the labor market is healing after wild fluctuations in the data at the beginning of October.
"It is mildly supportive of risk appetite. Generally risk appetite is very constructive this morning and the U.S. data did not raise any red flags," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
Higher Treasury yields also contributed to the stronger dollar.
The greenback hit a peak of 80.33, its highest since June 25. It firmed despite reported heavy offers just above 80 yen and traders said further gains could take it towards the late June peak of 80.59 yen. It last traded at 80.28, up 0.6 percent on the day.
The euro last traded at 104.14 yen, up 0.6 percent on the day, not far from a 5-1/2 month peak of 104.59 yen hit earlier this week.
The single currency was flat at $1.29 74 , paring gains earlier in the global session. E uropean Central Bank President Mario Draghi on Wednesday told German lawmakers that fears of illegal funding of governments or stoking inflation were misplaced.
"It entails that he (Draghi) is committed to what he is saying, and that some of the tail risk has been removed from the euro," said Arne Lohmann Rasmussen, head of FX research at Danske Bank in Copenhagen.
The euro hit a one-week low of $1.29 18 on Wednesday after weak German business activity and sentiment data, while uncertainty over when Spain may seek a bailout was also expected to hamper its rise.
The UK pound outperformed after better-than-expected third quarter GDP figures that showed the economy had lifted out of recession and lessened the chances of more monetary easing from the Bank of England next month.
Sterling jumped 0.6 percent to a one-week high of $1.6144 , although economists say one-off factors related to the London Olympic games may mask underlying weakness and the negative influence of the euro zone crisis.