FOREX-Dlr holds firmer tone vs yen, mkt digests G20

* Dollar/yen up 0.3 pct at 97.20 yen JPY=

* G20 meeting seen long on rhetoric, short on specifics

* Risk aversion seen intact; stock markets skittish

* Japan slips into recession in Q3

(Changes dateline, byline, adds quotes, updates prices PVS TOKYO)

By Veronica Brown

LONDON, Nov 17 (Reuters) - The dollar rose against the yen in narrow ranges on Monday, with risk averse positions seen staying in favour after the weekend's G20 meeting failed to come up with specific action to restore global market confidence.

The economic outlook continued to worsen as Japan joined the euro zone in recession, while U.S. data showed a record fall in retail sales in October. (For details please double click on [ID:nN14423234])

Britain will suffer its sharpest economic contraction in almost two decades next year, and unemployment could rise to almost 3 million by 2010, the Confederation of British Industry forecast.

Leaders of 20 leading economies, meeting in Washington over the weekend, agreed on a host of steps to rescue the global economy from the worst financial crisis in 80 years. But they left it to individual governments to tailor their response to their own circumstances and troubled industries.

"There's nothing we've had (from the G20) that changes people's view of the global economy or what the likely policy response is to it," said Daragh Maher, deputy head of global foreign exchange research at Calyon in London.

"The strategy that people have had has been 'Play strong dollar, play strong yen, buy those on the dips and if it ain't broke don't fix it,'" he added.

By 0845 GMT the dollar was up a quarter of a percent on the day at 97.14 yen JPY=, while the euro was little changed against the U.S. currency at $1.2658 EUR=

The euro was also flat at 123.06 yen, while it dropped a third of a percent to 85.54 pence EURGBP=.

RISK AVERSION INTACT

European share prices reflected the overall risk averse atmosphere, with the FTSEurofirst 300 Index struggling to stay in positive territory after falling in in early trade.

Japan's Nikkei share average's rose 0.7 percent .N225, despite data showing Japan slid into recession in the third quarter along with the euro zone. [JPGD1=ECI] [ID:nSP354083].

Analysts said the current preference for unwinding riskier FX positions, favouring the low-yielding dollar and yen, would stay in focus as investors concentrated on prospects for a prolonged global recession.

"We see little reason for de-leveraging as a key theme in global markets to abate and we continue to look for further yen and dollar strength over the coming 1-3 months, at the expense of the high yielding currencies and the euro," UBS strategists said in a note to clients.

Elsewhere, the Australian dollar initially sank more than 1.5 percent to US$0.6363 AUD= earlier in the global session, but then jumped quickly to around $0.6535.

Dealers suspected the Reserve Bank of Australia was intervening in the market in Asian trade, but the central bank would not confirm it had acted. The Aussie was last up 0.8 percent on the day.

The RBA intervened on at least two occasions last week, buying the Aussie around $0.6350 when the market was disorderly and lacking liquidity.

(Reporting by Veronica Brown; Editing by David Stamp)