* Yen rises broadly as Tokyo stocks head south
* Demand for yen, dollar intact on global economic worries
* Euro, pound slip before rate decisions from ECB, BoE
* NZ dlr off lows as market rewards proactive central banks
By Satomi Noguchi
TOKYO, Dec 4 (Reuters) - The yen and the dollar rose against other major currencies on Thursday, supported by concerns about a long and deep global recession and expectations that central banks in Europe will cut interest rates later in the day.
The euro and the British pound were vulnerable before decisions by the European Central Bank and the Bank of England, with expectations high that they will ease monetary policy aggressively to boost deteriorating economies and counter the threat of deflation.
Tokyo shares fell after rising earlier, keeping demand for the low-yielding yen and the safe-haven greenback intact after a slew of dismal data around the world kept investors concerned about the depth of the global recession.
Investors became cautious following a Bloomberg report that General Motors and Chrysler are considering accepting a pre-arranged bankruptcy plan in exchange for a U.S. government bailout.
Japanese companies cut investment in the third quarter by a higher-than-expected 13 percent from a year ago, a report showed, leading economists to expect the country's gross domestic product data, which has already initially shown a contraction, will be adjusted lower.
A report also showed the U.S. service sector posted its worst slump on record, adding to fears about Friday's release of the government's monthly employment figures.
"Having seen weak economic numbers coming in one after another, it's difficult for market sentiment to improve dramatically," a senior trader at a major Japanese bank said.
The euro fell 0.3 percent from late New York trade to $1.2676. The European Central Bank is seeing cutting rates on Thursday by at least 50 basis points to 2.75 percent, but many economists are expecting a 75 basis point cut.
Sterling was down 0.4 percent at $1.4730 after data showing that Britain's service sector shrank faster than expected in November. Against the yen, it fell 0.8 percent to 137.01 yen but stayed above a 13-year low around 136.30 yen hit the previous day.
The data boosted expectations that the Bank of England may slash rates by at least a full percentage point from 3.0 percent later in the day to shore up the domestic economy.
Traders said the euro and the pound could fall further if large interest rate cuts came in as expected due to their diminishing higher-yielding appeal.
But they may rebound quickly because investors now reward currencies of countries that have been acting proactively to save the economy from a deep recession, traders said.
"The market may have become used to extremely weak economic numbers and now wants to see how dramatic policy action taken across the globe, including monetary easing, will impact the economy and stock markets," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Bank.
"If stock markets become more resistant to further falls, the yen may have difficulties making further gains," Yamashita said.
The dollar was down 0.3 percent at 93.07 yen, crawling towards a five-week low of 92.53 yen hit on trading platform EBS the previous session. The euro slid 0.5 percent to 117.96 yen.
The yen has been the strongest among the world's major currencies despite Japanese investors' having been steady buyers of overseas assets.
Japanese investors have been net buyers of foreign stocks for the past 10 weeks, snapping up a total 2.87 trillion yen ($30.77 billion), government data showed on Thursday.
But the impact from such buying has been overshadowed by heavy unwinding of carry trades, in which investors use the low-yielding yen to purchase higher-yielding currencies or assets elsewhere.
The New Zealand dollar slipped 0.5 percent to $0.5300, after the country's central bank cut interest rates by a record 150 basis points to 5.0 percent, as expected. (Additional reporting by Rika Otsuka; Editing by Chris Gallagher)