* Risk aversion buoys dollar, yen
* Dollar dips vs yen as Nikkei drops 3.4 pct
* NZ dollar hits six-year low vs U.S. dollar
By Rika Otsuka
TOKYO, Jan 30 (Reuters) - The dollar rose against the euro on Friday as deepening concerns over the global recession prompted investors to shed risky assets and seek the harbour of the world's most liquid currency.
The yen climbed across the board as a drop in stock markets sparked unwinding of carry trades, in which investors use low-yielding currencies such as the yen to fund purchases of assets and currencies with higher yields elsewhere.
The New Zealand dollar struck a six-year low against the U.S. dollar after Reserve Bank of New Zealand Governor Alan Bollard said there was room for more interest rate cuts.
Worries over a prolonged global economic slump increased as government data showed that Japan's industrial output plunged 9.6 percent in December, the biggest drop on record.
That came a day after U.S. data showed jobless claims hitting a record high, orders for big-ticket items such as appliances falling for a fifth straight month in December and sales of new homes plunging 14.2 percent to an all-time low.
"It is surprising to see the dollar standing firm after such poor U.S. data," said a forex trader at a big Japanese bank. "The only explanation we have is that worldwide risk aversion moves continue to keep the dollar buoyant."
The euro fell 0.4 percent from late U.S. trade to $1.2902 after falling more than 1 percent on Thursday.
The European single currency slid 0.8 percent to 115.64 yen.
The euro took a hit on Thursday after billionaire investor George Soros told an Austrian newspaper that the currency may not survive without a European Union plan to deal with toxic assets.
His comments further dented a euro already bearish after European Central Bank President Jean-Claude Trichet warned that the ECB could push interest rates below 2 percent, and as data showed the biggest monthly jump in German unemployment in four years.
"The euro is likely to stay under selling pressure as there are expectations for a ECB rate cut this spring," said Osamu Takashima, chief currency strategist at Bank of Tokyo-Mitsubishi UFJ. The dollar fell 0.4 percent to 89.64 yen on a drop in stocks, while month-end dollar demand from Japanese companies limited losses.
Tokyo's Nikkei share average was down 3.4 percent at the end of morning trade.
The New Zealand dollar slipped 0.7 percent to $0.5098 after hitting a six-year low of $0.5077 according to Reuters data.
On Thursday, the New Zealand central bank cut interest rates by an aggressive 150 basis points to a record low of 3.5 percent to boost an economy deep in recession.
The kiwi sank 1.3 percent to 45.60 yen. It struck an eight-year low of 45.03 yen last week. (Editing by Brent Kininmont)