* Yen nurses biggest one-day fall vs USD in over a year
* China data not bad enough to provide lift for safe-haven yen
* BOJ surprise rate cut drives global bond yields lower
* Euro hit as European yields deeper in negative territory (Updates throughout)
By Shinichi Saoshiro and Ian Chua
TOKYO/SYDNEY, Feb 1 (Reuters) - The yen nursed broad losses on Monday and the euro was also on the defensive after the Bank of Japan adopted negative interest rates and sent bond yields sliding across the globe and particularly in Europe.
The dollar was up 0.2 percent at 121.30 yen JPY= , after having jumped nearly 2 percent on Friday - its biggest one-day rally in over a year.
The yen received little help from Chinese economic data, which were not impressive but not poor enough to revive safety flows into the Japanese currency.
Safe-haven flows into the yen driven by steep falls in global equities and crude oil took the dollar to a one-year trough below 116 in January, and some saw last week's shock BOJ easing directed towards arresting the yen's appreciation.
The BOJ said Friday it will charge 0.1 percent interest on current accounts that financial institutions hold at the central bank.
"Until recently, BOJ Governor (Haruhiko) Kuroda openly denied the possibility of lowering interest rates on current account deposits. The central bank may have considered the latest meeting as a chance to cause a strong surprise after seeing market expectations towards lower rates subside broadly," wrote Naohiko Baba, chief Japan economist at Goldman Sachs (N:GS) in Tokyo.
"Furthermore, Kuroda added that the central bank is ready to lower rates further if needed. This was likely aimed to keep retaining the currency market's attention and prevent the yen from rising."
The BOJ's move to adopt negative rates on Friday only cemented expectations the European Central Bank would ease further, sending German two-year yields DE2YT=RR to a fresh trough of nearly 50 basis points below zero.
That weighed on the euro, which was last at $1.0837 EUR= , well off last week's high of $1.0968. The common currency also pared gains on the yen, stepping back to 131.485 EURJPY=R from a one-month high of 132.45.
Weakness in both the euro and yen helped drive the dollar index .DXY back towards 100.00. It traded at 99.555, just off Friday's peak of 99.829.
The Australian dollar, often used as a proxy of China-related trades, was down 0.2 percent at $0.7071 AUD=D4 .
Private data on Monday showed activity in China's factory sector shrink for an 11th straight month in January, but at a slightly slower pace than in December.
The Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) inched up to 48.4 in January, beating market expectations of 48.0 and a slight pick-up from a reading of 48.2 a month earlier. ECONCN
(Editing by Peter Cooney and Kim Coghill)