* Yen holds firm as safe-haven flows return
* Emerging markets under pressure, rate hikes no help
* Fed cuts bond purchases to $65 bln a month as expected
LONDON, Jan 30 (Reuters) - Higher-yielding currencies like the Australian and New Zealand dollars came under pressure against the safe-haven yen and the dollar on Thursday as a sell-off in emerging market assets weighed on investor sentiment.
The mood darkened further after a private measure of Chinese manufacturing slipped to a six-month low for January and gave speculators a fresh excuse to target riskier assets like stocks and rush to the safety of U.S. Treasuries and German bunds.
The demand for Treasuries saw the U.S. 10-year yield fall to its lowest in more than two months on Wednesday. It stabilised around those levels, taking in its stride the Federal Reserve's decision to cut its monthly bond purchases by another $10 billion.
The gradual reduction in liquidity from the Fed, however, spooked higher-yielding and riskier currencies like the Turkish lira and the South African rand, all of which underpinned the dollar and the yen.
The dollar was up 0.35 percent against a basket of currencies at 80.782, while the yen gained against the euro , the Australian and New Zealand dollars .
The dollar inched up against the yen at 102.40 yen with more gains likely in store if U.S. growth data later in the session beats expectations. The Australian dollar was down 0.1 percent at $0.8725 while the New Zealand dollar was down 0.8 percent at $0.8155.
"A good GDP number could see U.S. yields push higher and then questions will be asked why should investors stay in structurally weak emerging market countries and not prefer the safety and better fundamentals of the U.S.," said Jeremy Stretch, head of currency strategy at CIBC World Markets.
"That should be supportive of the dollar."
The euro fell 0.4 percent to $1.3620, with investors gearing up for soft German inflation data to be released later in the day. That will stoke talk on whether the European Central Bank should ease policy further to ward off disinflationary pressures in the economy.
The wider euro zone inflation data is due on Friday.
NEW ZEALAND DOLLAR
Apart from souring sentiment towards higher-yielding currencies, investors were also quick to punish the New Zealand dollar after the Reserve Bank of New Zealand kept interest rates steady, dashing some expectations that it might raise them.
The kiwi dollar touched a one-month low of $0.8145 in the European session extending losses seen in Asia.
"The on-hold decision implies a little less urgency from the RBNZ than some participants may have thought, and a modest toning down of expectations is reflected in these adjustments," said Nick Tuffley, chief economist at ASB.
"It is unlikely it will fall too far, with the NZ economic outlook looking solid, and the prospect of higher interest rates just around the corner."
In contrast to the RBNZ, central banks in Turkey and South Africa lifted interest rates in the past 48 hours as they scrambled to stem a panic flight of capital that had sent their currencies and stocks skidding. Yet sentiment remained fragile with many emerging market currencies under pressure again.