* Euro recovers after Irish bank announcement
* Dollar/yen drops to 15-year low in early global session
* Euro falls to all-time low versus Swiss franc (Adds details, updates prices)
NEW YORK, Sept 8 (Reuters) - The euro erased losses and rose against the dollar and the yen on Wednesday after Ireland's finance ministry said nationalized lender Anglo Irish Bank would be split to wind down its assets, but analysts said markets remained wary of taking risk.
Earlier, the yen struck a 15-year high against the dollar and the Swiss franc hit an all-time peak versus the euro as concerns about euro zone banks and sovereign debt prompted a flight to safety.
"Just the (Irish) announcement bought a little relief rally" in the euro, said John McCarthy, director of foreign exchange trading at ING Capital Markets in New York. "But people are looking to sell the euros in substantial rallies as issues such as sovereign debt in the euro zone have not gone away."
The euro was up 0.5 percent at $1.2749
Concerns about how Ireland dealt with the troubled Anglo Irish Bank [ANGIB.UL] had weighed on investors until the announcement from the Irish government [ID:nLDE6871VE].
The euro rose 0.6 percent to 106.95 yen
YEN WATCH
Earlier in the global trading day, persistent buying by investors seeking a temporary refuge in the yen helped push the greenback through a major option trigger below 83.50 yen, again testing the Japanese authorities' pain threshold for strength in their currency.
"Not surprisingly, more rhetoric from Japanese policymakers has been unleashed, though the legitimacy of such talk is still in question until we see some actual action," said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.
Bank of Japan Governor Masaaki Shirakawa reiterated his reluctance to return to quantitative easing although he indicated the central bank was weighing its options. Finance Minister Yoshihiko Noda again warned he would take decisive action if necessary. [ID:nTOE687026]
"The growth and changing nature of FX since the Japanese last intervened should dampen their hopes for now. The speed of the move will be the cue ... My fresh target for dollar/yen is now 79.50 and for euro/yen 104.50," a London trader said.
The dollar fell as low as 83.34 yen on electronic trading
platform EBS
It later recovered to 83.90 yen
SWISS FRANC IN DEMAND
The euro is still below a three-week high of $1.2920 hit on
Monday on EBS
Adding to these worries was German Chancellor Angela Merkel's comment on Tuesday that Berlin will not support prolonging rescue mechanisms to underpin the euro indefinitely because it would damage the single currency. [ID:nLDE6861FU]
But the euro's early losses were limited as it found support at the 100-day simple moving average around $1.2670. Technical analysts saw the next support at $1.2605, the 50 percent retracement of the euro's May-to-August rally.
Analysts said a significant move below $1.27 required fresh downward impetus.
"We've had a lot of negative chatter (about euro zone banks) in the past few days, but no new, concrete news," said Peter Frank, currency analyst at Societe Generale in London.
"For the euro to keep weakening, we need confirmation of bad news, not just chatter from the local press," he said, adding the next big risk for the euro was Hungary, which must find a way to plug a gaping hole in its 2010 budget. [ID:nLDE6871J1].
The euro fell to a record low versus the Swiss franc of
1.2765 francs on EBS
The dollar fell to a nine-month low on EBS of 1.0060 francs
The euro was last up 0.4 percent at 1.2878 francs and the dollar down 0.1 percent at 1.0095 francs.
Elsewhere the Bank of Canada raised its key interest rate by 25 basis points to 1 percent as expected but said a weak U.S. economy would hamper Canada's recovery. [ID:nN08241537].
The U.S. dollar was last down 1.1 percent at C$1.0357. (Reporting by Nick Olivari; Additional reporting by Neal Armstrong in London; Editing by Andrea Ricci)