* Yen rallies broadly, hits 7-week high vs dollar, euro
* European shares fall 1 percent, risk aversion continues
* Traders await EZ Q2 GDP, U.S. jobs data, FOMC minutes (updates throughout; previous TOKYO)
By Naomi Tajitsu
LONDON, Sept 2 (Reuters) - The yen rallied broadly on Wednesday, hitting a seven-week high against the dollar and other major rivals as falling share prices stoked more risk aversion ahead of a raft of U.S. economic data later in the day.
A chill in risk demand kept the euro near a two-week low against the dollar, but a broad climb in the Australian dollar after surprisingly strong economic growth data for Australia suggested some traders remained keen to take on risk.
Analysts said traders were awaiting data on U.S. jobs, factory orders and productivity, and minutes from the Federal Reserve's policy meeting last month, to see whether the U.S. economy continues to improve before cranking up risk demand.
"We are constructive on data, we are constructive on risk as well but price action short-term tells us that the market is already positioned for a recovery," said Carl Hammer, currency strategist at SEB in Stockholm.
"We need some more consolidation in the coming days before moving higher in terms of risk appetite."
Before that, the market awaited a second reading of euro zone economic growth in the second quarter at 0900 GMT. Expectations are for a confirmation the economy shrank 0.1 percent on the quarter and 4.6 percent in April-June.
The dollar fell roughly 0.5 percent to 92.38 yen according to electronic trading platform EBS, hitting its lowest since mid-July.
The yen rose against other currencies considered to be higher risk, also hitting seven-week highs against the euro and sterling.
Helping to cut risk demand low was a 1.1 percent fall in European shares, which followed a slide in many Asian stock markets after lingering concerns about the health of U.S. banks stung U.S. stock futures.
Traders in Tokyo said yen gains were being driven by short-term speculative players, who were building long yen positions ahead of U.S. non-farm payrolls on Friday. They noted a risk that a worse-than-expected jobs reading may drive the dollar/yen down to the 90 yen mark.
The euro was flat on the day at $1.4220, stuck near $1.4177 touched on Tuesday, its lowest since Aug. 19. Against a basket of currencies, the dollar was unchanged on the day at 78.757.
AUSSIE SHINES
Despite overall risk aversion, the Australian dollar rose 0.5 percent to $0.8302 in the aftermath of figures showing the Australian economy grew by 0.6 percent on the quarter and the year in April-June, exceeding forecasts.
The Aussie rose as high as 77.59 yen against the Japanese currency in the aftermath of the data, before trimming some gains. Still, it stayed above 74.30 yen hit earlier in the day, its lowest since late July.
Traders said concerns were building about what happens to the U.S. economy once stimulus effects start to fade, and that was fuelling concerns about the health of the financial sector.
"Optimism about an economic recovery had put a lid on worries about the financial sector, but these are reviving as investors now see a greater chance of a slowdown after the policy-led rebound," said the chief FX manager for a Japanese trust bank in Tokyo. (Additional reporting by Tokyo Forex Team, editing by Chris Pizzey)