* Dollar, yen slip on BOJ move to buy shares
* Dollar, yen pare losses on caution over banks, economy
* European shares modestly higher in early trade
* Aussie dlr higher after RBA slashes interest rates 100 bps
(Recasts, changes byline, dateline prvs TOKYO)
By Tamawa Desai
LONDON, Feb 3 (Reuters) - The dollar and yen slipped on Tuesday when the Bank of Japan's share-buying scheme and Australian stimulus moves temporarily eased some of the caution about the global economy and banking system.
Currency markets continued to take their cue from equities, which were modestly higher in Europe, but the dollar and yen remained supported as they were perceived to be safer places to park money in times of stress.
"Despite the stimulus measures from Australia and Japan, we are not seeing a sustained impact on markets, and any correction should be short-lived," said Ian Stannard, senior currency strategist at BNP Paribas.
By 0819 GMT, the euro was roughly flat against the dollar at $1.2852. It was also roughly flat against the yen at 114.98 yen.
The top European share index was up 0.5 percent after falling more than 2 percent the previous day.
On Tuesday, the BOJ said it would start buying up to $11 billion worth of shares held by Japanese banks, saying their biggest risk was exposure to share markets.
The BOJ said it would buy the shares up until April 2010 and only pick up shares rated BBB- or above by ratings agencies.
But market players were sceptical that the BOJ's plan to buy shares from financial institutions would be enough to spur a sustained rally in Tokyo shares and recovery in risk appetite.
Tokyo's Nikkei share average closed down 0.6 percent after rallying some one percent earlier in the day.
The dollar rose 0.1 percent from late U.S. trading on Monday to 89.60 yen after hitting around 90.00 yen after the BOJ's announcement.
Meanwhile, the Australian dollar held most gains against the dollar and yen after the Reserve Bank of Australia cut its key cash rate by 100 basis points to a record low 3.25 percent as widely expected.
The rate cut came after Australia's government unveiled a new stimulus package totalling A$42 billion on Tuesday for the rapidly cooling economy.
"The interest rate cut was 1 percentage point as expected, and the market took that positively," said Akira Kato, a senior manager for Bank of Tokyo-Mitsubishi UFJ's foreign exchange trading department.
The Australian dollar was up 1.1 percent at $0.6385 after climbing to $0.6389. It had jumped 1.4 percent to 57.29 yen and was last at 57.24 yen. (Additional reporting by Masayuki Kitano in Tokyo; Editing by Ruth Pitchford)