* Chinese shares fall 4.3 percent, unnerving investors
* Yen, dollar rise broadly as investors seek safety
* Sterling tumbles as some BoE members wanted bigger QE
(Updates prices, adds quotes, changes byline, changes dateline, previous LONDON)
By Steven C. Johnson
NEW YORK, Aug 19 (Reuters) - The dollar and yen rose on Wednesday as a sharp slide in Chinese stock prices fed worries about the world economy and increased the safe-haven appeal of the U.S. and Japanese currencies.
Investors cut exposure to higher-yielding assets and currencies considered more dependent on strong global growth such as the euro and Australian dollar after a 4.3 percent plunge in the Shanghai Composite Index.
Sterling also tumbled after minutes from the Bank of England's last meeting showed some board members, including Governor Mervyn King, wanted an even bigger expansion in the bank's financial asset purchasing program.
Oil prices and European stocks also fell, while the U.S. S&P 500 futures index was down nearly 1 percent. And with no major economic news due Wednesday, traders said the currency market was taking its cue from stocks.
Shanghai's 4 percent plunge, which puts the index down 20 percent over the last two weeks, is "setting a very bad tone indeed for the rest of the global markets," said independent investor Dennis Gartman, author of The Gartman Letter.
He said gains in the yen, notably against the euro, suggest markets are growing more fearful and investors are reluctant to extend a multi-month rally in world stock prices.
The dollar shed 0.9 percent to 93.86 yen, a one-month low. The euro also hit its lowest level against the Japanese currency since late July, falling 1 percent to 132.50 yen. The euro fell 0.1 percent to $1.4114.
The yen and dollar typically gain when equities fall because investors buy them either as safe-havens or they unwind trades that were financed by borrowing these two currencies.
"Confidence in the outlook may not be so readily found among investors as was so clearly the case in the first half," said Neil Mellor, currency strategist at Bank of New York Mellon.
STERLING TUMBLES ON SURPRISE BOE SPLIT
Sterling shed 0.9 percent to $1.6408 after the BoE minutes revealed King and two other board members wanted to increase asset purchases by 75 billion pounds rather than the 50 billion pound expansion on which the bank ultimately decided.
Asset purchases require the BoE to print money, which some investors fear may lead to an oversupply of sterling and eventual inflation.
The euro rose 0.7 percent to 86.00 pence while sterling fell 1.7 percent to 153.97 yen.
The Australian dollar, which hit an 11-month high last week, fell 0.7 percent to $0.8199. Close trade links with China make the currency particularly sensitive to Chinese market and economic news. The New Zealand dollar retreated from its 2009 high, dipping 0.9 percent to $0.6677.
(Additional reporting by Jessica Mortimer in London; Editing by Andrea Ricci)