* Dollar index down 0.4 pct at 74.70
* UAE central bank action seen as stabilizing
* Yen slips after comments from Japanese officials
(Updates prices, adds comment, changes byline, changes dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, Nov 30 (Reuters) - The dollar fell against the euro and most major currencies on Monday after the United Arab Emirates central bank promised additional liquidity to local banks, soothing concerns about a looming debt default.
But market sentiment remained fragile, with the dollar briefly trimming losses, after a top Dubai financial official said the government does not guarantee Dubai World debt and Dubai World creditors are responsible for their actions.
The dollar's decline began earlier in the global session as Asian equities rallied on the UAE central bank's pledge to provide emergency support to the region's banks and as Dubai's oil-rich neighbor, Abu Dhabi, offered to provide selective support to Dubai companies.
"We've seen risk aversion decrease from the levels we saw on Thursday," said Camilla Sutton, currency strategist at Scotia Capital in Toronto.
But she added that even though the U.S. dollar is slightly weaker, most currencies are trading well within their recent ranges. "All in all, last week just shows how vulnerable markets are to any fears."
In early trading, the ICE Futures U.S. dollar index, a gauge of the greenback's performance against six other major currencies, was down 0.3 percent on the day at 74.788. The index touched a 15-month low of 74.170 last week.
The euro rose 0.3 percent to $1.5016, just over one cent away from last week's 15-month peak just above $1.5140.
Against the yen, the dollar gained 0.1 percent to 86.52 yen, rebounding from the 14-year low below the 85 level set last week.
U.S. stock futures pointed to a slightly higher open on optimism over holiday retail sales and as concerns about Dubai debt woes eased.
"Should investors sweep the Dubai-related jitters under the carpet, the dollar will likely face a further decline," said Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut.
JAPAN SPEAKS UP
The yen slipped after a Japanese government minister said the government has agreed to try to stem the currency's rise, although he didn't specify any measures.
"In light of the Dubai shock, we want to respond more aggressively than originally planned with an extra budget," strategy minister Naoto Kan, who is also deputy prime minister, told reporters. "We also want to stop the yen's rise and cooperate with the BOJ."
Finance Minister Hirohisa Fujii denied a report that he would not intervene in currency markets, saying he had never said intervention was impossible. Separately, Bank of Japan Governor Masaaki Shirakawa said currency volatility was undesirable.
Derek Halpenny, European head of global currency strategy at Bank of Tokyo-Mitsubishi UFJ, noted a "clear upturn" in Tokyo's concern about deflation and the strong yen.
"There's some speculation about intervention and what kind of policy measures will be put in place," he said.
There was little immediate impact on China's yuan policy after the euro zone's top economic officials met Chinese leaders over the weekend.
The Australian dollar was up 0.7 percent at $0.9135, and the New Zealand dollar was up 0.8 percent at US$0.7154.
The Reserve Bank of Australia meets on Tuesday. A decision to raise rates for a third straight time is seen as a close call.
Later in the week, investors will focus on the European Central Bank's decision on its one-year funding operation as it is expected to keep key rates steady on Thursday.
A U.S. jobs report on Friday is expected to show further improvement, but will be watched as a gauge of economic recovery.