* Quiet overnight session as ECB policy review looms; U.S. jobs data on Friday
* Yen drifts back towards 11-week peaks vs USD & EUR
* Euro a touch firmer vs USD despite risk of ECB easing
By Ian Chua
SYDNEY, Feb 6 (Reuters) - The yen hovered near multi-month highs against the dollar and euro early on Thursday, highlighting a cautious mood among investors still fretting about the recent selloff in emerging markets.
Trading, however, was light and expected to remain so as key event risks loomed. The outcome of the European Central Bank (ECB) policy review is due later on Thursday, followed by U.S. jobs data on Friday.
The dollar bought 101.51 yen, while the euro fetched 137.35 yen, both having lost a bit of ground overnight to be back near 11-week troughs of 100.75 and 136.25 respectively.
Traders put the yen's rise overnight to a bit of short covering rather than a pick up in flight-to-safety flows given that U.S. Treasuries slipped and emerging markets were pretty stable.
Mexico's peso actually gained after Moody's upgraded the country's sovereign rating to the coveted A rating.
Another odd move was the rise in EUR/USD even amid speculation the ECB may be forced to ease further to ward off the threat of deflation.
The common currency drifted up to $1.3534, pulling further away from a 2-month low of $1.3476 hit on Monday.
Perhaps explaining the euro's resilience, most money market traders polled by Reuters expect no imminent action from the ECB, believing the central bank would rather wait.
David Song, analyst at DailyFX warned the November low of $1.3295 could come into play for the euro should the ECB surprise by taking a more dovish stance.
"Tightening money-market conditions along with the growth threat for disinflation may push the ECB to further embark on its easing cycle, which could range from negative deposit rates to even unsterilized asset-purchases," he said.
Mixed U.S. data on Wednesday offered little support for the greenback. Growth in the service sector picked up pace in January while private employers added 175,000 jobs in January, the smallest gain since August.
Still, many analysts are optimistic that the closely watched U.S. non-farm payrolls report on Friday will show January hiring rebounded after a weak December, which saw a payroll gain of just 74,000.
The quiet overnight session saw the Australian dollar find a comfortable spot near 89 U.S. cents. It was not far from a three-week peak of $0.8943 set on Tuesday after the Reserve Bank of Australia dropped its easing bias and toned down its campaign of jawboning the currency lower.