* Euro inches down vs dollar, yen as risk appetite ebbs
* Focus on fate of U.S. automakers
* Australian dollar falls after downbeat data
By Kaori Kaneko
TOKYO, Dec 9 (Reuters) - The dollar rose against the euro on
Tuesday, reversing some of the sharp losses made the previous
day, as investor risk appetite ebbed slightly on subdued equity
market gains.
The euro had risen to its highest level against the dollar
since late November on Monday when rallying global stocks
markets, including Tokyo shares, boosted investor willingness to
buy riskier assets.
But market players were cautious on the outlook for equities
and risk appetite, citing fears that the weakness in the global
economy could be prolonged.
"There is persistent doubt about the sustainability of the
gains in stocks. It is difficult for currency market players to
simply react to the move in stocks," said Nobuaki Kubo, vice
president at BBH Investment Services.
Tokyo's Nikkei share average <> rose 0.8 percent but
some market participants said they had expected a stronger
advance after the S&P 500 rose 3.8 percent <.SPX>.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> climbed 0.1 percent on Tuesday after spiking 7
percent the previous day.
The euro fell 0.5 percent from late U.S. trading on Monday to
$1.2867 <EUR=>. Against the yen, the euro slipped 0.9 percent to
to 119.05 yen <EURJPY=R>.
Like the dollar, the Japanese currency has served as a safe
haven whenever investors have turned risk averse on a plunge
equities.
The dollar retreated 0.4 percent to 92.47 yen <JPY=>.
"The currency market is still mulling which way to move and
investors are unable to take risks," Kubo at BBH Investment
Services said.
U.S. stocks rallied to their highest level in a month on
Monday on hopes that U.S. President-elect Barack Obama's plan for
massive infrastructure spending could limit the pain of recession
and on hopes for a bailout for troubled U.S. automakers.
The White House reviewed a Democratic plan to bail out car
makers with up to $15 billion in loans, in a move that could also
clear the way for longer-term help if the industry meets certain
conditions. []
Traders said even if the bailout was approved, it may not
lead to added risk appetite as it remains to be seen whether the
rescue would provide a long term solution for the auto makers.
"The rescue plan being discussed is not strong enough to
solve the fundamental problem of the industry, " said Yousuke
Hosokawa, treasury department senior manager at Chuo Mitsui Trust
and Banking Company.
"Although the government is trying to do its best to prevent
the worst situation, more government spending always carries
concerns about its fiscal situation," he said.
The Australian dollar slipped lower on Tuesday after data
showed that sales and employment at Australian businesses slumped
in November to their lowest since 1992. []
It fell 1.8 percent to $0.6555 <AUD=> after marking a 3-
