* Euro/yen falls on speculative sales aimed at hitting stops
* Talk of euro/yen stops starting just above Y107.00
* Dlr/yen bids between Y84.80-Y85.00 but stops below-trader
By Masayuki Kitano
TOKYO, Aug 24 (Reuters) - The euro hit a nine-year low against the yen on Tuesday as the loss of key technical support led speculators to short the currency in the hope of forcing stop-loss sales against both the yen and the dollar.
Falls in Asian equities helped buoy the yen against the euro and broadly on crosses. There was also some talk of macro hedge-fund selling in the euro against the dollar.
"Some stops can be seen in the euro starting from a little above 107.00 yen. If those are hit, things could get a bit nasty," said a trader for a major Japanese brokerage house.
The euro fell to as low as 107.21 yen on trading platform EBS, its lowest since November 2001. After trimming some losses, the euro last stood at 107.36 yen, down 0.4 percent on the day.
Against the dollar, the euro hit a six-week low of $1.2620 on EBS.
After trimming some of its losses, the euro stood at $1.2628, down 0.2 percent from late U.S. trade on Monday.
Bears were targeting $1.2605, the 50 percent retracement of the euro's rise from a four-year low of $1.1876 in June to its August peak of $1.3334. A break here would open the way to at least $1.2522 and then $1.2479, daily lows from July.
YEN BROADLY HIGHER
The yen was broadly higher and edged back up towards a 15-year peak against the dollar hit earlier in August.
The greenback dipped 0.2 percent against the yen to 85.02 yen, slipping back towards a 15-year low of 84.72 yen hit on EBS earlier this month.
The trader for a major Japanese brokerage house said there was talk of bids in the dollar at levels near 85.00 yen to 84.80 yen, but added that stop-loss offers were lurking underneath.
The low-yielding yen is a funding currency for carry trades and can rise in times of market stress or when equities slide and are seen as denting investor risk appetite.
A trader for a major Japanese bank said that the Nikkei's drop to a 15-month trough suggests that some Japanese investors will likely be cautious about taking on additional risk, such as conducting unhedged overseas investment.
"I don't think they can move ... Their risk tolerance will not rise," the trader said.
With the yen having hit a 9-year peak against the euro and nearing a 15-year high against the dollar, traders were cautious about the potential for some kind of measures by Japanese authorities to stem the yen's rise.
A drop in the dollar towards 84.00 yen might prompt the BOJ to take monetary easing steps even before its next monetary policy meeting in early September, said a trader for a Japanese bank.
Japanese Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa discussed the yen and had agreed to work closely in a phone conversation held on Monday, but Kan did not ask the central bank to ease monetary policy further, and the two did not touch on currency intervention either.
Market players say the most likely response from Japanese authorities may be for the BOJ to increase the size or extend the duration of its three-month fixed rate fund supply operation.
But traders are sceptical that Japanese authorities would resort to yen-selling intervention unless the yen's rise picks up more speed. (Additional reporting by Wayne Cole and Krishna Kumar in Sydney; Kaori Kaneko in Tokyo; Editing by Joseph Radford)