* Euro rises vs dollar and yen, rebounding from Weds fall
* EZ flash manufacturing, services PMI at 6-month highs
* Investors wary of U.S. bank stress tests
(Updates prices; changes byline, dateline; previous TOKYO)
By Jessica Mortimer
LONDON, April 23 (Reuters) - The euro edged up against the dollar and the yen on Thursday after surveys showed the euro zone's manufacturing and services sector had their best performance in six months.
Along with currencies viewed as higher risk such as sterling and the Australian dollar, the euro recovered from sharp falls the previous day which took it to its lowest in over a month against the dollar.
Sentiment was also helped by gains in U.S. stock futures, while European equities were steady.
Analysts said trade was tentative, however, with ongoing concerns about the global economy and the upcoming results of "stress" tests on U.S. banks putting a lid on any rebound in riskier assets.
"The dollar has taken a slight hit, but it's not a big move. It's a bit of a balancing act for euro/dollar at the moment," SEB currency strategist in Stockholm Johan Javeus said.
Traders also noted that a large options expiry due on Thursday at $1.3000 in euro/dollar was keeping the pair trading close to that level.
At 0822 GMT, the euro rose 0.2 percent against the dollar to $1.3026 and by 0.5 percent against the yen to 128.05 yen.
The single currency had fallen as low as $1.2885 against the dollar on EBS trading systems on Wednesday, the weakest since March 16.
Among currencies seen as higher risk, sterling rose 0.7 percent against the dollar to $1.4577, rebounding after steep falls the previous day in the wake of a grim UK budget, while the Aussie dollar rose 0.4 percent to $0.7080.
The yen also fell on profit-taking after heightened risk aversion bolstered the Japanese currency on Wednesday, with the dollar up 0.3 percent at 98.27 yen.
BETTER PMI DATA
The latest provisional euro zone purchasing managers' surveys for April showed the indices for both the services and manufacturing sectors improved much more than expected, suggesting the region's deep recession is no longer worsening.
The readings were their highest in six months, but the PMI indices remain well below the 50 level that divides growth from contraction. See.
"The improvement in the April manufacturing and service sector purchasing managers' surveys is encouraging, and it adds to the increasing signs that euro zone contraction is starting to moderate," Global Insight economist Howard Archer said in a note.
He added, however, that "actual recovery still looks some distance away" and the improved figures would not prevent the European Central Bank from cutting interest rates by another quarter point and announcing non-conventional measures in May.
Meanwhile, investors remain cautious about the results of the U.S. government's "stress" tests on U.S. banks, while concerns linger about the fate of troubled U.S. automakers.
The Wall Street Journal reported that U.S. banks will be briefed by regulators as early as Friday on how they performed in the tests before the results are made public later.
Some estimates of banks' likely losses that were used in the stress tests were tougher than expected, the newspaper said. (Reporting by Jessica Mortimer, editing by Mike Peacock)