* Yen slips vs sterling and euro as stock markets rise
* Sterling dips vs dollar but well off 23-year lows
* Focus on Germany's Ifo survey
By Masayuki Kitano
TOKYO, Jan 27 (Reuters) - The yen slipped versus the euro and sterling on Tuesday as investors' appetite for risk improved after British bank Barclays said it would report a 2008 pretax profit and U.S. data showed a rise in home sales.
Sterling dipped against the dollar, giving back some of the previous day's gains, but remained well above 23-year lows hit late last week after data showed that Britain's economy shrank at its fastest pace since 1980.
Traders said the yen could fall further against the sterling and euro in the near term, especially if global stock markets rise and point to further improvement in investors' risk appetite.
"There has been some unwinding of long positions in the yen because the earnings announced by Barclays were good and equities were strong," said a trader for a major Japanese bank.
The euro could rise back towards 120 yen in the near term, he said, adding that the dollar may extend its gains against the yen if stop-loss buying is triggered at levels above 90 yen.
The euro rose 0.1 percent against the yen on trading platform EBS to 117.53 yen and rose to as high as 117.95 yen earlier on Tuesday, having rebounded from a seven-year low of 112.08 yen hit last week.
The dollar rose 0.2 percent to 89.31 yen, staying above its lowest level in more than 13 years of 87.10 yen struck last week.
In the stock market, the Nikkei share average rose around 3 percent at one point.
On Monday, Barclays said it had no need to raise capital and sales of existing U.S. homes unexpectedly rose 6.5 percent.
The U.S. Senate's decision on Monday to back Timothy Geithner to be Treasury secretary was in line with market expectations and had a limited impact on currencies, said the trader for a major Japanese bank.
Despite the rally in sterling and the euro the previous day, traders said those currencies were unlikely to see a sustained rally at this point.
"I don't think market players have sufficiently factored in a worsening in economic conditions," said the trader for a major Japanese bank, referring to the euro zone and British economies.
Sterling fell 0.2 percent against the dollar to $1.3968 but stayed well above a 23-year low of $1.3500 hit late last week.
Against the yen, sterling hovered near 124.65 yen, having rebounded from a record low of 118.80 yen hit last week.
One key for the euro later on Tuesday will be Germany's Ifo monthly business climate index, traders said.
A Reuters poll of economists shows that German corporate sentiment likely deteriorated in January to the lowest levels since German reunification in 1990, due to weakening demand and production cuts. (Editing by Michael Watson)