* Euro falls to lowest since March vs Swiss franc
* Cross/yen dragged down by euro's fall vs Swiss franc
* Rumour of coup in Pakistan triggers Swissie move
* Pakistan denies coup, traders say move exaggerated by stops
By Kaori Kaneko
TOKYO, Dec 18 (Reuters) - The yen and Swiss franc rose on Friday after a rumour of a coup in Pakistan, which was denied by the president's spokesman, prompted investors to close positions in the euro and riskier currencies and triggered stop-loss orders.
The euro hit its lowest since March against the Swiss franc, often considered a safe-haven currency, and the yen surged against the dollar, euro and higher yielding Australian dollar as thin liquidity set a chain reaction in motion.
A spokesman for Pakistani President Asif Ali Zardari dismissed the coup rumours that started after a government minister suspected of corruption was stopped from leaving the country, saying there was no coup.
The currencies later recovered the worst of their losses but the euro was still down about 0.4 percent on the day at 1.4957 francs and the dollar, which fell 1 percent at one point, was still down 0.6 percent at 89.46 yen.
The rumour tapped into year-end anti-risk position closing, after U.S. share markets fell, exaggerating the move as investors who have been long riskier currencies against the yen closed out.
"The euro/Swiss was just at the key point on the charts and a rumour about Pakistan seemed to have pushed down the pair," said Tomohiro Nishida, treasury department manager at Chuo Mitsui Trust and Banking Company.
"Stops below 1.50 francs accelerated falls in a market with low liquidity and spurred risk avoiding trade at the year-end."
The euro, which has also been under pressure from worries about sovereign debt risks, fell as low as 1.4910 francs, its weakest since March.
The euro also fell 0.4 percent to 128.43 yen, sterling was down 0.5 percent against the yen and the Australian dollar dropped 0.5 percent to 79.40 yen.
The euro held steady at $1.4353 after falling as far as $1.4304 on trading platform EBS on Thursday, its lowest since early September.
The Bank of Japan concludes a two-day policy meeting on Friday. It is expected to leave interest rates unchanged and will likely hold off on new policy initiatives after putting in place a new funding operation at an emergency meeting just two weeks ago. (Additional reporting by Satomi Noguchi; Editing by Joseph Radford)