* Yen gains as investors reduce risk exposure; dlr edges up
* Bank of America deemed to need $34 bln more capital-source
* Markets wary before US stress tests, ECB and BoE meetings
* US ADP data awaited at 1215 GMT; key US jobs data due Fri
(Updates prices, adds quotes)
By Jessica Mortimer
LONDON, May 6 (Reuters) - The yen rose across the board on Wednesday, while the dollar edged up against the euro as investors braced for the results of U.S. stress tests on banks and a number of other events that could dampen market sentiment.
Concerns about these results, which are due on Thursday, were heightened after a source familiar with the tests said Bank of America required as much as $34 billion in additional capital .
This prompted investors to pare back exposure to risk, buying back into the perceived safety of the yen and the dollar against the euro and currencies seen as higher risk such as the Australian dollar.
Markets were also cautious ahead of Thursday's policy decisions by the European Central Bank and the Bank of England and key U.S. non-farm payrolls data on Friday. .
U.S. ADP employment figures for April due at 1215 GMT could also give a clue on just how badly the U.S. jobs market is faring as the market looks ahead of Friday's closely watched jobs numbers.
This nervousness called a halt to a recent rally in risk assets, which propelled the Australian dollar to a seven-month high against the dollar and the yen earlier this week as optimism built that the global economy may be over the worst.
"Some of the news flow on the U.S. stress tests has caught people on the hop a bit and people are suddenly worried about the potential for a shock," RBS currency strategist Paul Robson said.
"Risk appetite will probably return but I would be surprised if people got bullish on risk ahead of all the events coming up this week," he added.
At 1139 GMT, the euro fell 0.7 percent against the yen to 130.77 yen, while the dollar lost 0.5 percent to 98.36 yen.
Against the dollar, the euro fell 0.2 percent on the day to $1.3295, well below the one-month high of $1.3439 touched on trading platform EBS on Tuesday, while the Australian dollar fell 0.2 percent to $0.7400
BETTER DATA
Data continued to suggest that the global economy is showing tentative signs of recovery.
The euro zone purchasing managers' index for services was unexpectedly revised up to post its biggest one-month rise since December 2001, while the equivalent survey for the UK showed the slowest contraction in the sector in eight months. See and.
The better euro zone data and a warning from China's central bank that U.S. quantitative easing measures could cause the dollar to weaken briefly pushed the euro into positive territory against the dollar.
But it was soon pegged back, with investors remaining nervous ahead of Thursday's policy announcement by the European Central Bank (ECB), as well as one from the Bank of England (BoE).
The ECB is expected to cut interest rates to a record low of 1 percent, while the BoE is seen holding rates at 0.5 percent, also a record low, though the main focus will be on whether the ECB announces any additional unconventional policy measures..
Analysts noted, however, that beyond this week the mood is likely to remain buoyant and a rally in riskier assets could resume.
"Evidence of green shoots in the global economy is still present, with improvements in leading economic indicators and in key areas such as the U.S. housing market, and there are no signs that things will turn the other way," Stockholm-based SEB currency strategist Johan Javeus said.
(Reporting by Jessica Mortimer)