* Yen buoyed as investors take shelter
* Euro falls after weak euro zone figures, ahead of ECB
* Aussie down before expected hefty rate cut by RBA
* Kiwi hits 6-year low after data shows slowing job market
By Kaori Kaneko
TOKYO, Feb 2 (Reuters) - The yen rose against major currencies on Monday after poor economic data in the United States and the euro zone heightened investors' fears about a prolonged economic recession.
The euro faced downward pressure after data showed a worsening labour market and receding inflation, while ratings firm Moody's downgraded the outlook on Ireland's long-term debt to negative from stable.
Worries about the faltering global economy prompted investors to shun high-yielding currencies such as the Australian and New Zealand dollars, and seek shelter in the relatively safer yen.
"Basically, the market trend has not changed after data in the U.S. and the euro zone showed faltering economies," said Yuichiro Nakamura, FX dealer at Shinkin Central Bank. "The yen is the key beneficiary, and the dollar is the next."
A report on Friday showed that the U.S. economy shrank 3.8 percent in the fourth quarter, its fastest pace in nearly 27 years. That was not as bleak as the market forecast of a 5.4 percent contraction, but the data showed a broad-based contraction across nearly all sectors.
Except against the yen, the U.S. currency was firmer, though investors were cautious about pushing the dollar higher as they mulled the fate of U.S. plans to clean up debt and recapitalise banks.
As early as this week, U.S. President Barack Obama and his economic advisers may begin to flesh out such plans and could lay out a range of options, including setting up a so-called "bad bank" that would buy assets from banks and offering guarantees that would cap losses at a certain threshold.
"If a bad bank is set up, it would be fresh, positive news and lift U.S. stocks. That would likely ease risk aversion to some extent," said Nakamura.
The dollar was at 89.77 yen, slipping 0.2 percent from the level in late U.S. trade on Friday.
The euro hovered around two-month lows against the dollar amid anxiety about the slumping economy in Europe and ahead of a European Central Bank monetary policy meeting this week.
The ECB is widely expected to take a break in its rate cutting cycle but take action in March as both growth and inflation slide to new lows, a Reuters poll showed.
The euro was down 0.7 percent at $1.2732 after falling as low as $1.2714 on trading platform EBS, the lowest since early December.
Against the Japanese currency, the euro declined 0.9 percent to 114.27 yen.
The Aussie was weighed down after weak Australian housing data reinforced expectations of a bold rate cut on Tuesday. Analysts expect the Reserve Bank of Australia to cut its key cash rate by 100 basis points to 3.25 percent, the lowest since the central bank began to target it in the early 1990s, a Reuters poll showed.
The Australian dollar fell 0.7 percent to $0.6327, after hitting a two-month low of $0.6312, according to Reuters data.
The New Zealand dollar fell 1.2 percent to $0.5029 after hitting $0.5017, a six-year low, Reuters data showed. New Zealand wage growth eased from record levels in the fourth quarter, data showed on Monday, leaving the way open for more interest rate cuts.
The kiwi dipped 1.3 percent to 45.09 yen, not far from an eight-year low of 45.03 yen touched last month. (Editing by Chris Gallagher)