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* Yen hits fresh 4-year low vs euro, 6-month low vs dollar
* German inflation eyed for clues on euro
* Trading light with U.S. markets shut for Thanksgiving
By Anirban Nag
LONDON, Nov 28 (Reuters) - The yen struggled near lows against the euro and the dollar on Thursday, and was on track for one of its worst monthly performances this year as investors sold the low-yielding currency to buy higher-yielding assets.
The greater appetite for risk drove the MSCI World equity index close to its October 2007 record high, and Japan's Nikkei hit its highest close in nearly six years while Germany's DAX hit a new peak.
All this kept the yen, currently the most commonly used funding currency for Japanese and overseas investors seeking higher returns in assets such as stocks, under pressure.
Activity was relatively thin with U.S. financial markets shut for Thursday's Thanksgiving holiday.
The euro rose 0.3 percent, to 139.15 yen, just shy of its June 2009 high of 139.26 yen. A move above that level would take the euro to its highest in five years.
"The latest yen move is led as much by euro/yen as by dollar/yen and has further to go. Bond outflows from Japan are picking up and though this doesn't correlate particularly well with anything the yen does, I think dollar/yen is on its way to 110," said Kit Juckes, currency strategist at Societe Generale.
The dollar was slightly higher at 102.20 yen, pinned near six-month highs of 102.28 yen struck earlier in the day.
With government debt yields anchored by the Bank of Japan's massive bond-buying programme, Japanese investors have been seeking higher returns abroad. They amassed nearly $14 billion in foreign bonds last week in their seventh straight week of net buying - the longest such run in a year.
Many investors expect the yield differential between U.S. Treasuries and JGBs to widen, though the impact of foreign bond buying on foreign exchange markets is limited if investors hedge their bond purchases.
Overall, though, the dollar underperformed on lingering doubts over whether the Federal Reserve will start withdrawing monetary policy stimulus in the near term. The dollar index was down 0.2 percent at 80.567.
"As long as the dollar remains week and draws little support from Fed policy, we will see the euro push higher," said Neil Mellor, currency strategist at BNY Mellon. "That will be unhelpful for euro zone exporters."
Against the dollar, the euro traded at $1.3605, very close to a one-month high of $1.3613 struck on Wednesday.
Investors will await German November inflation due later in the day, before Friday's euro zone 'flash' consumer price data. Last month a surprise drop in German inflation drove the broader euro zone consumer price index lower, triggering a European Central Bank interest rate cut.