* Yen hits another 14-year high on dollar, yen crosses fall
* Pro-risk trades unwound on concerns about Dubai debt
* Japan finmin raises prospect of G7 joint statement on FX
* Japan govt, BOJ were checking dlr/yen rates - sources
By Satomi Noguchi
TOKYO, Nov 27 (Reuters) - The yen hit its highest level in 14 years on the dollar on Friday before trimming gains as Japanese authorities made their presence felt by calling banks, moving one step closer to intervention to stem the yen's surge.
Market sources said Japan's government and the Bank of Japan had checked dollar/yen rates with commercial banks in morning trade in Asia, something dealers said went further than their normal market contact.
Concerns about debt problems in Dubai saw investors unwinding yen-funded carry trades in the likes of the Australian and New Zealand dollars in early Asian trade, causing the dollar to plunge to a new 14-year trough below 85 yen.
Japan's finance minister raised the prospect of a Group of Seven joint statement on currencies to cool the yen's rally, but some traders and analysts were sceptical the move was disorderly enough to draw a response from the U.S. or Europe just yet.
However, traders said talk of the calls to banks and the comments from officials had encouraged dealers to trim long yen positions, although they said they doubted Japan's authorities were ready to intervene just yet and this could have been a feint to discourage speculators.
"We heard about it (the call to banks) from different directions in the market," a trader at a Japanese bank said.
"The Bank of Japan may have wanted to make its presence felt."
The dollar fell as far as 84.82 yen, its weakest since 1995 and ever closer to its record low of 79.75, before pulling back up to 86.10 yen, still down 0.5 percent on the day.
Stop-loss selling in the dollar by Japanese margin traders likely gained steam after the greenback's drop below 86.00 yen, according to major margin broker GAITAME.com.
The broker also said initial signs suggested that there was a surge in loss-cut selling by margin traders earlier on Friday.
In a market made thinner by a U.S. holiday on Thursday, Japanese exporters had fuelled the early drop by buying yen ahead of the month-end, while traders also dumped dollars due to option triggers at 85.00 yen. Sell orders then kicked in below that level.
"It is all about unwinding of carry trades with the euro falling and the Aussie being the most vulnerable," said Hideaki Inoue, deputy general manager of foreign exchange trading at Mitsubishi UFJ Trust Bank.
"The yen is drawing funds because of its relative safety appeal in comparison to the euro and the dollar after the Dubai debt scare raised caution over potential loan problems among European banks and a credit crunch in emerging markets."
Dubai struggled to ease fears of debt default on Thursday after its move to delay repayments at two flagship firms shook confidence in the Middle East as a centre for investment and a source of capital.
European share markets fell on Thursday and stocks in Asia also dropped, adding to the nervous climate.
"The market was driven by stop losses in yen crosses in thin trade," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking.
The euro dropped 1.6 percent to 127.92 yen after falling as far as 126.95 yen, its lowest since late April. The Australian dollar shed 2 percent to 77.32 yen, after tumbling below 76.60 yen.
The euro was down 1 percent at $1.4845 and the dollar index was up 0.9 percent at 75.508.
JAPAN OFFICIALS ALERT OVER DOLLAR FALL
Finance Minister Hirohisa Fujii raised the prospect of a Group of Seven joint statement on currencies and said a government response to extreme moves was possible.
While some analysts said the G7, or the bigger G20, could issue a statement to prevent the dollar from weakening further, or Japan could step in alone, others doubted the chance of joint intervention above 80 yen.
"The rhetoric that we've heard seems to be trying to quell speculation that Japan won't ever intervene but it seems to indicate that they'd prefer not to do so," said Naomi Fink, Japan strategist at Bank of Tokyo-Mitsubishi UFJ.
"The dollar is weakening because the main imbalance in the U.S. economy is driven by the (Chinese) renminbi peg to the greenback. So joint intervention is not going to do a whole lot on that." (Additional reporting by Satomi Noguchi, Charlotte Cooper, Masayuki Kitano; Editing by Joseph Radford) ((kaori.kaneko@thomsonreuters.com; Reuters Messaging: kaori.kaneko.reuters.com@reuters.net; +81-3-6441-1983)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))