* Dollar at 86.70 yen <JPY=>, off 14-yr low below 86.30 yen
* Dubai debt problems dent risk appetite, support dollar
* Traders cite SNB selling Swiss franc; SNB declines comment
* Japan's Fujii: watching fx moves closely
(Recasts, updates prices, adds quotes and comment)
By Tamawa Desai and Jamie McGeever
LONDON, Nov 26 (Reuters) - The dollar edged up from 14-year
lows against the yen on Thursday as renewed risk aversion
prompted investors to shed riskier assets, giving pause to broad
dollar selling.
A two percent fall in European stocks <> and a one
percent drop in U.S. share futures encouraged traders to trim
positions that involved selling dollars for other currencies and
assets like commodities.
Market players also refrained from re-testing lows on the
dollar as trade thinned for the U.S. Thanksgiving Day holiday.
But dollar-bearish sentiment remained intact on views U.S.
interest rates would stay low for some time and on pressure for
the dollar to weaken to correct the U.S.' imbalances.
By 1242 GMT the dollar index, a barometer of its performance
against six major currencies, rose 0.5 percent on the day at
74.629, up from a 15-month low of 74.170 earlier in the day.
Dubai's shock move on Wednesday to restructure its biggest
corporate debtor, Dubai World, and delay repayment on some of
the company's $59 billion of liabilities, dented risk appetite
across asset markets on Thursday, to the dollar's benefit.
"While much of the moves are going to occur in rates and
credit markets, it is also being reflected in stock markets and
foreign exchange," said Lauren Rosborough, senior strategist at
Westpac in London.
The euro <EUR=> was down a third of percent on the day at
$1.5080, after rising more than 1 percent on Wednesday to a
15-month high of $1.5145 on EBS.
But many expected the dollar to resume its decline.
"It's a sort of 'dead cat bounce' in a sense," said Roberto
Mialich, strategist at Unicredit in Milan. "We had a sharp drop
yesterday and people are taking profits. But the euro remains
above the previous high of $1.5060."
SNB ACTS, JAPAN CHATS
The dollar also fell to its lowest level against the Swiss
franc since April 2008, but the Swiss currency's rise was
abruptly halted as the Swiss central bank was seen selling its
currency, traders said.
The dollar rose back above 1.0000 francs <CHF=>, having
earlier tumbled to just above 0.9900 francs on EBS.
Some market participants said the SNB bought up to $1
billion in early Europe hours. The SNB did not comment. More
dollar/Swiss franc selling was seen later in the day.
"As well as the retest of the perceived intervention level
of 1.50 franc in euro/Swiss franc, we would note Swiss franc's
overnight rally took the trade-weighted index back through the
level at which the SNB first intervened in March," said Adam
Cole, global head of FX strategy at RBC Capital Markets.
"That is perhaps another reason to think the central back
will act aggressively to prevent further strength."
In contrast, Japanese authorities refrained from acting on
the yen's rise, saying it was watching the market cautiously.
The dollar shot through a previous low of 87.10 yen to fall
to 86.29 yen on trading platform EBS, its weakest level since
1995. Traders said 85 yen was now in the market's sights.
But analysts said the yen's appreciation was more a result
of a falling dollar and Japan would need cooperation from the
United States and Europe if it wanted to buy dollars.
"Unless the United States takes the stance that a one-sided
fall in the dollar is unfavourable, the dollar's fall will
likely continue," said Mitsuru Sahara, chief manager of currency
derivatives trading at Bank of Tokyo-Mitsubishi UFJ.
"The possibility of Japan intervening depends on the pace of
the dollar's fall versus the yen and its impact on other markets
such as Japanese stocks and bonds."
For a snap analysis on yen intervention, see [].
Japan has not intervened in currency markets since March
2004.
(Editing by Ron Askew)
((Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net;
+44 207 542 8510))
