FOREX-Yen rises on weak European shares, c.banks awaited

* Yen rises, slide in Europe shares keeps risk aversion high

* Markets await central bank meetings on Thursday

* Aggressive rate cuts may boost dollar, yen

(Changes dateline, byline, releads, updates throughout; previous TOKYO)

By Naomi Tajitsu and Harpreet Bhal

LONDON, Dec 3 (Reuters) - The yen rose on Wednesday, boosted as a slide in European shares kept investors wary of taking on risky positions, while the market awaited interest rate meetings by major central banks.

Currency movements were subdued as markets braced for rate decisions by the central banks of the euro zone, the UK, New Zealand and Sweden on Thursday, with most of them expected to slash a full percentage point or more from their benchmark rates to help steer their economies through a global recession.

The yen hovered near a five-week high against the dollar and was well-supported across the board on a 1.9 percent fall in European shares .FTEU3, while data on the European service sector showed increasing weakness in the single currency zone.

"The risk appetite environment is still very brittle," said Paul Robson, strategist at RBS in London.

"The only risk trade here is the yen, which is benefitting against all currencies."

China's central bank entered the domestic foreign exchange market on Wednesday to offer dollar liquidity. However many in the market believe China is adjusting its currency policy towards moderate yuan depreciation to stimulate the economy [nSHA298852].

By 0914 GMT, the euro had fallen 1.1 percent to 117.32 yen, and slipped 0.6 percent against the dollar to $1.2630 .

The dollar slipped 0.5 percent to 93.05 yen, hovering near a five-week low of 92.63 yen struck on electronic trading platform EBS on Tuesday.

The low-yielding yen was broadly supported, pushing the high-yielding New Zealand dollar down 1.8 percent , and keeping sterling near a 13-year low around the 137 yen hit on Tuesday.

RATE DECISIONS AHEAD

Euro zone services PMI fell to 42.5 in November from 45.8 in October, showing that the services sector is deteriorating in tandem with the manufacturing sectors as the region slides into recession [nL1417755].

Ongoing signs of economic weakness are seen prompting the European Central Bank to cut interest rates by 50 basis points or more on Thursday, from 3.25 percent at the moment. The Bank of England is seen slashing rates by 100 basis points or more from 3.0 percent

Analysts say bigger-than-expected rate cuts could push high-yielding currencies including the euro, sterling and the New Zealand dollar lower, as they would decrease the yield advantages that these currencies have over their rivals.

"The biggest risk is for non-dollar currencies simply because central banks such as the Riksbank and the ECB and the BoE have the scope to lower interest rates by a greater extent and that is priced into the markets," said Philip Shaw, chief economist at Investec in London.

He added that aggressive cuts by the BoE and the ECB would likely put the euro and sterling under selling pressure, while boosting the dollar. (Reporting by Naomi Tajitsu and Harpreet Bhal)