FOREX-Yen gains on risk aversion afer China data

* Yen gains on rising risk aversion

* Aussie, kiwi slide as shares fall

* Dollar holds most gains, traders await FOMC

* Eyes on U.S. Treasury quarterly refunding ahead of Fed (Adds comment, details, updates prices)

By Nick Olivari

NEW YORK, Aug 11 (Reuters) - The yen gained against most major currencies on Tuesday as investors bought the low-yielding currency amid rising risk aversion after negative data from China earlier in the global session.

China reported below-forecast growth in factory output and investment, reminding markets that the world's third-largest economy is not yet back on a solid footing. [ID:nPEK328668]. The news also added to the currency woes of the so-called commodity-bloc countries that supply raw materials to China.

The dollar traded in a tight range, swinging between gains and losses against a basket of currencies as investors awaited a policy statement from the Federal Reserve and speculated whether strong U.S. data would support the currency going forward.

U.S. jobs data last week boosted expectations for higher U.S. interest rates by early 2010, but with a Fed announcement scheduled for the conclusion of a two-day meeting Wednesday, some dollar investors are choosing to wait rather than continue to buy.

High-yielding currencies fell as European and U.S. stocks fell .FTEU3.GSPC, prompting traders to sell currencies seen as higher-risk versus the dollar and the yen.

Analysts said there were few market-moving events, and trading volumes were thin in the summer holiday season.

"The euro/yen is being driven by risk aversion, but this is only in yen buying, not in the dollar," said Greg Salvaggio, vice president at Tempus Consulting in Washington.

Midway through the New York session, the dollar was down 1.3 percent at 95.84 yen JPY=, off an eight-week high of 97.79 yen set last week on electronic trading platform EBS. The euro was down 1.4 percent against the yen at 135.35 yen EURJPY=R.

The Australian dollar AUD= fell 1.1 percent to $0.8288, while the New Zealand dollar slipped 1.2 percent on the day to $0.6676. The U.S. dollar rose 1.2 percent against the Canadian dollar to C$1.1014.

The dollar index was little changed at 79.238 .DXY, extending gains into the fourth day. It swung between 79.355 and 79.008.

"We're in consolidation mode right now as the anticipation builds for the Fed statement tomorrow afternoon," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "The Fed will acknowledge some better data, but also downplay the idea that an exit strategy will start soon."