FOREX-Swiss franc near highs, yen climbs on risk aversion
(Updates quotes, prices)
* Swiss franc hovers near record highs versus euro, dollar
* Safe-havens in demand in jittery market
* Yen bounces back from intervention lows, more official action likely
* U.S. employment report due at 1230 GMT
By Neal Armstrong and Nia Williams
LONDON, Aug 5 (Reuters) - The Swiss franc hovered near record highs and the yen rose on a sharp fall in risk sentiment on Friday as concerns over global growth and euro zone debt contagion kept safe-haven currencies in demand in volatile trade.
Stock markets around the world were jittery after heavy losses in early European trade, with market players fretting over the threat of another recession in the United States and policymakers' inability to stem the spread of the euro zone's debt crisis.
Investors sought refuge in gold while the franc slipped a touch in European dealing, but markets were readying for further strength in the currency while remaining on alert for any signs of intervention from the Swiss National Bank.
"If risk aversion intensifies euro/Swiss could approach parity and then we will likely see intervention. But given market conditions there's reluctance from the SNB to come in," said Derek Halpenny, head of global currency research at Bank of Tokyo-Mitsubishi UFJ.
"We are pretty much in global financial crisis mode. It's a very dangerous time."
The franc rose to a record high against the euro of 1.0710 francs in early Asian trade but retreated to 1.0859 in European dealing on fears of official action to weaken the currency after comments from Swiss National Bank Chairman Phillip Hildebrand.
He was quoted as saying the SNB would not accept a further appreciation in the franc without acting, having already cut interest rates this week in an attempt to stem the currency's strength.
Both the euro and dollar spiked against the Swiss franc at one point in European trade, igniting speculation the central bank was intervening. But traders reported no sightings of the SNB in currency markets so far.
The dollar was last up 0.25 percent against the franc to 0.7668 after hitting a session high of 0.7740 but remained within sight of a record low of 0.7610 hit on Wednesday.
YEN BOUNCES BACK
The yen retraced some of Thursday's heavy losses when massive selling intervention from the Bank of Japan pushed it sharply lower against the dollar , but further official action was expected.
Japanese Finance Minister Yoshihiko Noda said he was closely watching yen moves on Friday, signalling a readiness to continue selling the currency.
Some market players said further yen intervention could come later in the session if U.S. non-farm payrolls due at 1230 GMT undershoot a forecast increase of 85,000 in July and trigger a fresh bout of risk aversion.
"Dollar/yen is slowly fading but the process of intervention has not stopped. They impressed the market yesterday but have to continue to do so," said Sebastien Galy, currency strategist at Societe Generale.
"There is very little incentive to intervene before non-farm payrolls but if there is a poor number chances are they will intervene seconds afterwards."
A brief spike in the dollar against the yen from around 78.50 yen to an intraday high near 79.40 yen in Asia stirred talk of more intervention, which proved to be unfounded.
The dollar later dipped to trade down 0.8 percent on the day at 78.42 yen . The euro was down around 0.5 percent at 111.10 yen , having risen above 114 yen the previous day.
Support for the dollar was at 78.27 yen, a 50 percent retracement of the dollar's rise from its four-month low of 76.29 to Thursday's high of around 80.25 yen.
Japan's Nikkei business daily said the solo selling intervention totalled a record 4 trillion yen.
Analysts said a weak payroll reading would trigger demand for the U.S. dollar against all currencies except the Swiss franc and yen, and weigh on the euro which was last up 0.4 percent at $1.4169.
The single currency recovered from a fresh three-week low of $1.4055 hit earlier in the session as Spanish and Italian government bond yield spreads tightened off their widest levels in volatile trading .
The European Central Bank surprised many market players on Thursday by broadening its liquidity operations but some said that had only made investors think that economic conditions in Europe may be deteriorating further.