* Yen rallies broadly, struggling stocks curb risk demand
* Euro pares losses as Europe shares pull back from low
* Bernanke reappointment has limited impact
* Focus on U.S. consumer confidence data due at 1400 GMT
(Updates into Europe midsession, changes byline)
By Emelia Sithole-Matarise
LONDON, Aug 25 (Reuters) - The yen rose broadly on Tuesday, advancing in particular against the euro and sterling as a retreat in European shares from a 10-month high the previous day undermined demand for currencies considered to be high-risk.
Still, the euro trimmed losses as European shares pulled back from a roughly 0.5 percent fall in early trade, when it took a cue from a 2.6 percent fall in Chinese shares.
"There was a lot of focus on Chinese equity markets ... that seems to be part of the reason the yen and dollar are doing better than higher-yielding currencies," said Adarsh Sinha, a currency strategist at Barclays Capital in London.
"Apart from that markets are just waiting to see what U.S. data will show later today," he said, referring to figures on U.S. home prices due at 1300 GMT and a consumer sentiment index at 1400 GMT.
The euro traded little changed on the day at $1.4293, clawing back some losses after slipping to the day's low of $1.4254 according to Reuters data, in early European trade.
Analysts said the euro offered little reaction to figures confirming German's economy grew by 0.3 percent in the second quarter and exited a recession.
The dollar index was little changed but the U.S. currency fell as low as 93.80 yen in early trade, as the yen was the main beneficiary of the pullback in risk demand. By 1100 GMT, the pair traded at 94.13 yen, down 0.4 percent on the day.
Analysts said that in summer holiday-thinned trade, currency movements were largely being dictated by other asset markets, making them vulnerable to a pullback in stocks and commodities.
"Some capital markets still look a bit overpriced relative to the hard economic data, so some of the correction we've seen in the pro-cyclicals is to be expected," said Phyllis Papadavid, currency strategist at Societe Generale in London.
She added the correction may continue when traders return from holidays, which could further boost currencies considered to be safe-haven, including the yen and the dollar.
The Swiss franc held steady against the euro and the dollar after Swiss National Bank board member Thomas Jordan made no mention of the central bank's position on combating excessive strength in the currency in a speech earlier.
Swiss authorities have been intervening in the currency market since March.
BERNANKE REAPPOINTED
Three-month interbank offered rates for the dollar fell further below those for yen on Tuesday, which fuelled some speculation of a possible expanding role of the dollar as a funding currency. Three-month Libor rates for dollar dipped beneath those for yen for the first time in 16 years on Monday.
Some analysts said the dollar may be at risk if this dynamic continued, while pointing out that the prospect of the U.S. currency becoming a major funding currency was unlikely, given speculation that U.S. interest rates may rise early next year.
The dollar showed little reaction to news that U.S. President Barack Obama would reappoint Federal Reserve Chairman Ben Bernanke for a second term on Tuesday.
High-risk currencies struggled against the yen, pushing the euro down 0.4 percent, while sterling fell 0.7 percent. (Additional reporting by Naomi Tajitsu; editing by Chris Pizzey)