* Yen rises 0.7 percent vs dlr; up 1.1 percent vs euro
* China's GDP disappoints, sending yen higher
* Dollar index up 0.2 percent; U.S. stock futures lower
* Euro on defensive; eyes on euro zone CPI, industry output
By Tamawa Desai
LONDON, April 16 (Reuters) - The yen and dollar rose against other major currencies on Thursday as hopes for a speedy economic recovery receded, pushing investors toward perceived safer assets.
Market players were disappointed after data showed China's economic growth slowed to its weakest on record. That came after weak U.S. retail sales and a fall in inflation the previous day.
U.S. stock market futures were also lower, indicating increased economic concerns, while European share prices pared earlier gains.
"Investors are reassessing whether a recent rally in risk assets is sustainable and if a economic recovery is taking place," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"When such views are exacerbated to the downside, the yen is perched to move higher," he added.
As of 0747 GMT, the yen was up 0.7 percent against the dollar at 98.64 yen, while it was up 1.1 percent against the euro at 129.79 yen.
The Australian dollar was down 1.32 percent at 71.28 yen while the New Zealand dollar fell 2.1 percent at 56.37 yen.
The dollar rose 0.2 percent against a basket of currencies.
Meanwhile, the euro remained on the back foot, as the prospect of further monetary easing remains a risk after European Central Bank Governing Council member Axel Weber said on Wednesday the central bank will lay out a package of "non-standard" measures that will stretch into next year.
Traders will keep an eye on euro zone final inflation data for March, with prices expected to be confirmed to rise by 0.6 percent from the same period a year ago.
Separately, euro zone industrial production is forecast to fall 2.4 percent month-on-month and to drop by 17.6 percent year-on-year.
The yen had fallen earlier in the global session as short-term speculators bought commodity currencies such as the Australian dollar ahead of the China GDP announcement, expecting the figures would outstrip forecasts in a positive signal for the global economy.
Low interest rates in Japan mean the yen has been used to sell against higher-yielding currencies such as the Australian dollar, where official rates are 3 percent and the economy is expected to benefit from a pick-up in Chinese growth.
But China's annual GDP growth slowed to 6.1 percent in the first quarter from 6.8 percent in the final three months of last year, prompting market players to reverse positions and buy the yen back.
"The data disappointed the market because there was talk that China's GDP would be around 8 percent, which pushed currencies such as the Australian dollar and sterling higher before the data," said Masato Mori, a senior manager at NTT SmartTrade.
"With the global economy weak there had been hopes that stronger-than-expected Chinese GDP would help pull it out of recession," he said.
The market was also awaiting earnings reports from major U.S. companies such as JPMorgan on Thursday and Citigroup on Friday, traders said.
U.S. housing starts data later in the session will also be closely watched.
The U.S. Treasury Department on Wednesday declined to label China a currency manipulator, retreating from tough talk last year when a campaigning Barack Obama said Beijing had kept its currency's exchange rate unfairly low.
In a semiannual report to Congress on currency practices of key trading partners, the Treasury said all were suffering from the current global economic downturn, but said none manipulate their currencies for trade advantage. (Additional reporting by Kaori Kaneko in Tokyo; Editing by Toby Chopra)