* Dlr, yen edge lower as stocks rise in early trade
* Euro up 0.2 percent at $1.3285, up 0.4 vs yen
* German March CPI up 0.5 percent y/y, industrial output awaited
* BoE seen keeping rates unchanged, continue QE (Releads, adds quotes, updates prices, changes dateline prvs TOKYO)
By Tamawa Desai
LONDON, April 9 (Reuters) - The dollar and yen softened against other major currencies on Thursday as stocks rose in early trade, renewing appetite for so-called riskier assets.
Currency markets have recently taken their cue from equities as big U.S. firms kicked off first quarter earnings, with the focus on financial firms' results due out next week.
"With the earnings season yet to enter full swing, the market is still willing to give risk appetite the benefit of the doubt," said Geoffrey Yu, currency strategist at UBS.
But volatile stock markets and uncertainty over banks kept investors jittery, and activity was also limited ahead of the Easter holiday.
By 0801 GMT, the euro was up 0.2 percent at $1.32852, coming back from a session low of $1.3232.
Against the yen, the euro was up 0.7 percent at 133.16 yen.
U.S. stock futures were up in early London trade, with S&P futures up 0.3 percent.
European shares pared early gains from strength in banks, commodity issues and after rises overnight on Wall Street and in Asia.
Data on Thursday showed Germany's consumer price index rose by 0.5 percent in March from the same period a year ago, confirming earlier estimates.
Traders await German industrial output data for February, due out at 1000 GMT. Output is expected to have fallen 3.1 percent from the previous month.
European Central Bank President Jean-Claude Trichet said on Thursday he welcomed U.S. authorities saying a strong dollar was in U.S. interests and that it was important for all partners to be responsible on exchange rates.
The dollar rose 0.4 percent to 100.10 yen after falling about 0.8 percent on Wednesday. It rose as high as 101.45 yen on Monday to strike a six-month peak.
The yen eased as the Nikkei share average rose 3.7 percent in the wake of the Japanese government announcing a $154 billion stimulus plan.
Capital flows data showed foreign investors turned net buyers of Japanese stocks last week for the first time since late November and Japanese investors sold a net 2.11 trillion yen ($21.16 billion) of foreign bonds as they moved into the new financial year.
"That would suggest on the face of it that's yen positive but the price action in dollar/yen (last week) would tell you otherwise," said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.
"There looks to be an interesting two-way tug-of-war between those who want to push dollar/yen higher on the back of the risk appetite story and the real money flows suggesting dollar/yen should actually go lower," Trinh said.
Sterling eased against the dollar ahead of the Bank of England's policy decision due out at 1100 GMT.
The BoE is expected to keep interest rates unchanged at a record 0.5 percent and continue its 75 billion sterling "quantitative easing" programme of buying government and corporate bonds in a bid to boost liquidity.