By Gertrude Chavez-Dreyfuss and Sinéad Carew
NEW YORK (Reuters) - The safe-haven yen rose to a seven-week high against the dollar on Thursday amid a batch of generally weak U.S. data and overall uncertainty about the economic outlook, backing the Federal Reserve's concern on Wednesday about the pace of recovery.
The Japanese unit also climbed to its highest since late July against the euro, but came off its peak after the single euro zone currency reversed gains versus the dollar. Euro moves versus the greenback tend to spill over to other euro currency pairs.
The dollar index rose to a one-week high, but last fell on the day, as risk appetite made some sort of a comeback. U.S. Treasuries pared some gains, while oil prices advanced more than 2% <CLc1>. <US/>
Thursday's set of U.S. economic data added to the gloom in risk sentiment.
U.S. jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index fell.
"The economic outlook is so uncertain -- we'll have news or events that would say there is a vaccine in October and next that there would be a vaccine at the end of 2021," said Ron Simpson, managing director, global currency analysis, at Action Economics in Tampa, Florida.
"Some of the economic numbers were good, some not so good, and so the outlook changes daily."
Analysts said the economic data justified the Fed's ultra-easy monetary policy.
The Fed pledged on Wednesday to keep rates near zero until the labor market reaches "maximum employment" and inflation is on track to "moderately exceed" the 2% target, with most policymakers seeing rates on hold through at least 2023.
In afternoon trading, the dollar fell 0.3% against the yen to 104.69 yen <JPY=EBS>, after sliding to a seven-week low of 104.52.
The euro was flat to slightly lower against the yen at 123.93 yen <EURJPY=EBS>. Earlier it touched a low of 123.33 yen, its weakest since late July.
The dollar index, a measure of its value against six major rivals, was last down 0.2% at 92.956 <=USD>. It hit a one-week high earlier in the session of 93.614.
The euro <EUR=EBS> briefly hit a five-week low against the dollar at $1.1737, and was last up 0.2% at $1.1841, after buyers emerged below the 50-day moving average of around $1.1745, according to Action Economics.
With the Fed focused on keeping U.S. interest rates at current record lows until employment and inflation reach its targets, some strategists said dollar strength was likely temporary.
"We're looking at a scenario where the next rate hike in the United States could be in 2024," said Bipan Rai, North America head of FX Strategy at CIBC Capital Markets in Toronto. "That's going to keep the U.S. dollar under pressure for a long time.
Sterling was slightly lower at $1.2960 <GBP=D3> after earlier posting steep losses in the wake of the Bank of England saying it was had briefed on how negative interest rates could be implemented effectively, should it be needed..
(Reporting by Gertrude Chavez-Dreyfuss and Sinead Carew; Editing by Andrea Ricci and Jonathan Oatis)