FOREX-Dollar falls vs yen as jobless claims rise

* Yen rallies as stocks fall, recession worries grow

* US jobless claims spike, dollar gains vs high-yielders

* Stocks slide; US automakers a key pressure point

* For up-to-the-minute market news, click on FXNEWS

(Updates prices, adds U.S. data, changes byline, dateline)

By Steven C. Johnson

NEW YORK, Nov 20 (Reuters) - The dollar fell against the yen on Thursday but gained against high-yield currencies as stock markets plunged and a spike in U.S. jobless claims added to fears of a deepening global recession.

The Swiss franc CHF= also fell sharply after the Swiss National Bank unexpectedly slashed interest rates by a full percentage point, citing worsening economic conditions.

With anxiety about economic growth on the rise, investors continued yanking money out of risky assets such as stocks, commodities and high-yield currencies and parking it in U.S. government bonds or Japanese yen, which many borrowed cheaply to finance investments elsewhere.

These safe-haven flows pushed two-year U.S. Treasury yields to a record low and pushed the high-yielding New Zealand dollar NZD= to its lowest level against the greenback since 2003.

A report showing the number of Americans filing for first-time jobless benefits spiked to 542,000 last week, more than economists had expected, added to the unease [ID:nN20394100].

"Anxiety about the financial markets is shifting to anxiety about fundamentals and the real economy, and that's keeping the overall levels of risk aversion very high," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

"We've had disappointing U.S. economic data and we believe the bear market in equities will continue, lending more support to the dollar and yen."

The dollar was last down 0.9 percent at 95.01 yen JPY= while the euro fell 0.9 percent to 118.92 yen EURJPY=.

The euro was little changed against the dollar at $1.2514 EUR=, while sterling fell 0.7 percent to $1.4858 GBP=. Against the Swiss franc, the dollar rose 0.7 percent to $1.2200 CHF=, boosted by the SNB's surprise rate cut [ID:nLK597124].

Asian and European stocks fell sharply on Thursday and Wall Street pointed to a weaker opening a day after the S&P 500 Index fell to its lowest level since early 2003 .SPX.

Analysts said investors remained nervous about the U.S. automakers, which are seeking $25 billion in emergency loans from Congress, and the viability of banking giant Citigroup (C.N), whose shares slid to a multiyear low on Wednesday.

The U.S. jobless data on Thursday intensified concerns and signaled more trouble for the labor market, which has shed more than 1 million jobs so far in 2008.

On Wednesday, a separate U.S. report revealed a record decline in U.S. consumer prices in October, sparking fears of deflation, a risk that Federal Reserve Vice Chairman Donald Kohn said had increased.

The Fed also forecast the U.S. economy would contract in the second half of 2008 and first half of 2009, raising the prospect of a further reduction in the benchmark interest rates from an already low 1 percent.

Major central banks have been slashing rates aggressively in an attempt to boost their economies during an extreme slowdown. Figures this month show that Japan and the euro zone fell into a recession in the third quarter.

"People are starting to give up on the hope that the economy is going to recover," said David Woo, head of currency research at Barclays Capital in London.

All of that means continued gains for the dollar against most currencies save the yen, said Alan Ruskin, international strategist at RBS Greenwich Capital in Greenwich, Connecticut.

"I am disinclined to fight the risk aversion trade," he said. "There are too many fires to put out -- a variety of U.S. financial institutions in the spotlight and an auto sector crying for help with time working against it.

(Additional reporting by Veronica Brown in London; Editing by Chizu Nomiyama )