* Investors seek safety in yen, Swiss franc
* But FX moves contained, signal no panic for now
* Focus shifts to ECB meeting later on Thursday
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Tommy Wilkes
LONDON, Oct 25 (Reuters) - The Japanese yen and Swiss franc rose on Thursday as investors sought safety following a wave of selling across stock markets, although moves in currency markets were modest and suggested investors were far from panicking.
The euro also gained, recovering from two month lows hit on Wednesday and ahead of a European Central Bank monetary policy meeting later on Thursday.
Asian stocks followed their U.S. counterparts into a sea of red overnight. The S&P 500 declined for a sixth straight day as weak forecasts from chipmakers added to concerns about the impact on earnings from tariffs and a slowdown in China’s economy.
European indexes were set to open sharply lower and the selloff in October has raised fears of the end of a near-decade long bull-market.
“To a large extent until today there had been a lack of reaction in the FX markets. We are starting to see this come through...Now it’s really adding up, the fragile macroeconomy and the political risks,” said Christin Tuxen, an FX strategist at Danske Bank.
However, Tuxen said that the modest size of currency moves on Thursday reflected that recent data showed a “loss of momentum in global growth” rather than a risk of recession or something serious enough to spook forex investors.
The yen rose to as high as 111.82 versus the dollar, but later gave up most of those gains to trade at 112.100, up 0.1 percent on the day.
The Swiss franc rose 0.2 percent versus the dollar to 0.9963 but was down marginally against the euro.
The euro rose 0.2 percent to $1.1417, away from the two month lows of $1.1378.
That left the dollar nursing losses, with the greenback index off 0.2 percent at 96.241
There were other signs of relative calm in currency markets. The Australian dollar, often viewed as a bellwether for global risk, rose 0.2 percent to $0.7078 before flatlining.
The main event of the day is the ECB meeting, and investors will be looking for any new guidance on a possible slowdown in growth across the euro zone as well as the row between Brussels and Rome over Italy’s budget plans.
The ECB is not expected to offer any surprises and instead confirm that the end of quantitative easing next year is on track, although there is a risk president Mario Draghi sounds more dovish given recent headwinds.
“Euro has limited upside given risk factors such as the Italian budget, Brexit and more recently the softening economic activity,” said Rodrigo Catril, senior currency strategist at NAB.
“Mario Draghi will have to acknowledge weakness in the data and reaffirm that the ECB monetary tightening path is data dependent.”
Sterling recovered from six-week lows to $1.2912, up 0.2 percent on the session.
British Prime Minister Theresa May received a show of support from her Conservative Party on Wednesday at a meeting in parliament, shifting the focus away from talk of an imminent leadership challenge over her Brexit strategy. (Additional reporting by Vatsal Srivastava in Singapore; Editing by Toby Chopra)