TOKYO, Aug 31 (Reuters) The yen slid across the board hitting a record low against the euro on Thursday after Japanese industrial output figures came in below forecasts and cemented expectations the Bank of Japan will take time raising interest rates.
The low-yielding yen also struck eight-year lows against sterling and the Swiss franc after data showed output fell 0.9 percent in July from a month earlier, compared with a market forecast for a rise of 0.7 percent.
Coming in the wake of soft Japanese inflation data last week, the output readings bolstered expectations that the Bank of Japan will raise rates only slowly, after hiking for the first time in six years -- to 0.25 percent from zero -- last month.
By 0035 GMT, the euro was at 150.50 yen after striking a record high of 150.62 yen on electronic trading platform EBS.
The dollar rose to 117.25 yen from 117.15 yen in late U.S.
trade. The euro was nearly flat against the dollar at $1.2835 Providing support for the single European currency against the yen were expectations that the European Central Bank at a meeting of later in the day could signal higher rates are in store for the euro zone.
After hiking to 3 percent at the start the month, the ECB is not expected to boost rates on Thursday. Instead investors are focused on what ECB President Jean-Claude Trichet has to say after the meeting about prospects for another rise at the next gathering in October.
Analysts are looking for Trichet to tweak his language to say that the ECB will be ''vigilant'' against inflationary risk from its current position of watching prices ''very closely''.
''They will leave room to raise rates whenever needed,'' said the chief trader at a European investment bank in Tokyo.
The euro has gained around 8 percent against both the yen and the dollar this year, helped by the narrowing of the rate gap with other currencies.
So far this week, data and events have had little effect on the market's view that the Federal Reserve sees no urgent need to raise U.S. rates from 5.25 percent after pausing earlier in August from two years of tightening credit.
For clues about the Fed outlook, the market will scrutinise key data still due to land, including July's PCE index -- the central bank's favoured inflation gauge -- at 1230 GMT and August payrolls on Friday.
Reuters SRS VP0640