* Yen off 11-week highs against US dollar and euro
* Aussie sharply higher after stellar rally
* Kiwi underpinned by solid jobs data
By Ian Chua
SYDNEY, Feb 5 (Reuters) - The yen got off to a weak start in Asia on Wednesday having retreated from multi-month highs as emerging markets stabilised and stocks rebounded, while the Australian dollar took a breather following a powerful rally.
The U.S. dollar bounced to 101.63 yen, while the euro climbed to 137.33 yen, both pulling away from 11-week lows of 100.75 and 136.25 respectively.
But analysts at BNP Paribas remained cautious about re-entering long dollar/yen positions, instead preferring to wait for further signs of stabilisation in the risk environment.
"Opinions remain divided on whether the Tuesday rally (in risk assets) is anything more than a dead cat bounce," they wrote in a note to clients.
Against the U.S. dollar, the euro was slightly softer at $1.3516, holding near a two-month low of $1.3476 amid caution that the European Central Bank (ECB) could sound more dovish at Thursday's policy review.
With inflation running well below the ECB's target and the spectre of deflation gripping the euro zone, the ECB is under pressure to do more to pep up the block's weak recovery.
The show stopper, however, was the Australian dollar which surged across the board after the Reserve Bank of Australia dropped its bias to cut interest rates and toned down its rhetoric against the currency.
The new stance caught some by surprise and sparked a vicious short-covering rally that saw the Aussie soar against the yen, dollar, euro and just about every other major currency.
The Aussie jumped to $0.8920 following a 2.0 percent rally and traded at 90.76 yen, having surged 2.7 percent in its biggest one-day move in 10 months. The euro dropped 2 percent to A$1.5135.
Traders said the close above 89 U.S. cents was encouraging and could fuel a bullish trend reversal that should pave the way for a retest of this year's peak at $0.9087 set on Jan 13.
However, some analysts expect the Aussie's longer-term downtrend will stay intact.
"We will maintain long-term bearish outlook for the AUDUSD as the Federal Reserve moves away from its easing cycle," said David Song, currency analyst at DailyFX.
Against its New Zealand peer, the Aussie rose as high as NZ$1.0948 but has since erased most of the gains to be back near NZ$1.0800.
With the Reserve Bank of New Zealand considered all but sure to hike interest rates in March, investors were reluctant to bet against the kiwi dollar.
Cementing the central bank's hawkish stance, data on Wednesday showed solid jobs growth in New Zealand and an increase in the number of people actively looking for work.
The upbeat data sent the kiwi to a one-week high against the U.S. dollar at $0.8259.