* Yen rallies broadly on ongoing banking woes
* Yen up near 13-1/2-yr peaks vs dlr, 7-yr high vs euro
* Sterling resume slides after rebounding on G7 comment
By Satomi Noguchi
TOKYO, Jan 22 (Reuters) - The yen rose broadly on Thursday towards a 13-1/2-year peak against the dollar and a near 7-year high versus the euro hit the previous day amid growing investor anxiety about global banking woes.
The pound resumed falls against the dollar towards 23-year lows, erasing gains made after a source told Reuters that its slide will be discussed at the next meeting of the Group of Seven industrialised countries.
The pound has been under severe stress this week as a government rescue package for struggling British banks failed to reassure investors or stem losses in banking stocks. At one point on Wednesday, sterling plunged as low as $1.3620, its lowest level since 1985.
The decline came after shares of Barclays Plc tumbled by as much as a third in value to a 24-year low in London on fears that it needs to raise funds or could be nationalised.
U.S. stocks jumped on Wednesday, rebounding from a two-month low, but that did little to soothe worries about global banking sector fragility and investors continued to shift funds into the perceived safety of the yen and the dollar.
"Sterling still looks far from hitting a bottom with mounting expectations for further and bigger interest rate cuts from the Bank of England to combat the quickly deteriorating economy," said a senior trader at a Japanese trust bank.
"The prospect for more and aggressive policy action from Britain is helping sterling at the moment, but the market remains very jittery, making price movements extremely choppy," the trader said.
The Bank of Japan is expected to unveil details of how it will scoop up commercial paper to thaw credit crunch at the end of its two-day policy meeting later in the day, but is widely seen holding interest rates at 0.10 percent.
Traders said expectations for further shrinking interest rate gaps between Japan and Britain, Europe added to the yen's strength versus sterling and the euro.
The dollar fell 0.8 percent to 88.80 yen, after rebounding from Wednesday's low of 87.10 yen, the lowest since July 1995.
The euro dropped 1 percent to 115.27 yen, falling towards a near 7-year trough of 112.08 yen, and slid 0.4 percent to $1.2975.
The pound fell 0.4 percent to $1.3888 after having rebounded sharply in late overseas trade on Wednesday when France's economy minister, Christine Lagarde, said the BoE should take more steps to support sterling.
Sterling dropped 1.5 percent to 123.15 yen but was above a record low of 119.36 yen touched the previous day. (Editing by Edwina Gibbs)