* Yen rises across aboard as investors unwind carry trades
* Worries about economy, stocks weigh on risk sentiment
* Yen's biggest move vs dollar since March
* G8 communique doesn't mention FX; Q2 earnings eyed (Updates prices, adds details)
By Wanfeng Zhou
NEW YORK, July 8 (Reuters) - The yen soared broadly in its biggest jump in months on Wednesday as renewed concerns about the global economy prompted investors to exit risky investments.
Oil prices fell and stocks were lower throughout most of the U.S. trading session as investors worried the recovery won't be as smooth or rapid as expected. This also led to a sell-off in higher-yielding, commodity currencies like the Australian dollar.
"It's renewed risk aversion, triggered by mounting doubts about a near-term economic recovery that's evident in the sell-off on Wall Street and the subsequent decline in risk assets in general," said Omer Esiner, senior currency analyst at Travelex Global Business Payments in Washington.
In late New York trading, the U.S. dollar slid 2.3 percent to 92.63 yen, having hit 91.82 yen, its lowest since February, according to Reuters data.
The euro dropped 2.6 percent to 128.59 yen after hitting 127.05 yen, its lowest since May.
At current prices, it was the biggest one-day drop in the euro against the yen since January and the biggest one-day decline by the dollar against the yen since March.
The sharp moves in the yen sparked some speculation in the market that Japanese officials may try to slow the currency's rise, which hurts the country's exporters.
"I don't foresee it at these immediate levels," Esiner said. "Although I do think that if the velocity of the move higher in the yen continues, then certainly verbal intervention becomes a risk."
Gains in the yen accelerated after it broke through key technical levels, traders said. Investors reversed trades where they had borrowed in yen to buy higher-yielding currencies.
"It's a risk-driven market, and risk is in the process of being unwound," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.
"That's hitting the yen crosses, and carry trades are under significant pressure," he added. "Most of the selling so far of those yen crosses has been absorbed by dollar/yen."
Against the dollar, the euro was down 0.3 percent at $1.3877.
Investors also grappled with an uncertain outlook for second-quarter earnings season, which unofficially kicked off after the bell on Wednesday. Investors are concerned that companies will have little good news in their quarterly reports and outlooks.
The Australian dollar fell by 1.5 percent to $0.7772 and hit its lowest level since mid-May against the yen, shrugging off data earlier on Wednesday showing a surge in Australian consumer confidence.
G8, CHINA
Risk aversion also bolstered the dollar, adding momentum after leaders of the Group of Eight major economies did not discuss the dollar's role as the key global currency at Wednesday talks on the economy.
News that Chinese President Hu Jintao, who was due to attend the summit in Italy, was returning home to deal with unrest in the western region of Xinjiang had already dampened speculation that any currency comment would be added.
China had been one of the most vocal governments in seeking to discuss an alternative international currency to the U.S. dollar, but political turbulence in China has turned investors' attention elsewhere.
Political turbulence in China led investors to question whether Chinese economic growth will be a driver of the global economy.
"Part of the optimism earlier about a worldwide recovery was based on the assumption that China would be this locomotive of growth and keep the rebound going," said Boris Schlossberg, director for currency research, at GFT Forex in New York.
"As the political situation in China becomes problematic, it provides another reason for investors to sell any high-yielding currencies, benefiting the dollar and the yen," he added. (Additional reporting by Vivianne Rodrigues and Nick Olivari in New York; Editing by Kenneth Barry)