* Yen briefly dips on crosses after batch of Chinese data
* Industrial output and retail sales a bit above expectations
* But new Chinese local-currency loans fall in Oct
* Dollar index pares losses after hitting 15-mth low
By Masayuki Kitano
TOKYO, Nov 11 (Reuters) - The yen rose against the dollar on Wednesday buoyed by stop-loss buying and also eked out gains against the high-yielding Australian dollar after a mixed batch of Chinese economic data.
The yen fell initially after the figures showed Chinese industrial output and retail sales rose a bit more than expected in October from year earlier, with industrial output growth jumping to a 19-month high in the year to October.
The dollar also dipped broadly after the data and hit a fresh 15-month low of 74.889 against a basket of currencies.
But dips by the yen and dollar against currencies such as the higher-yielding Australian dollar quickly lost steam, and the currency market reaction was limited overall.
"The numbers are a bit mixed," said Masafumi Yamamoto, chief FX strategist for Japan at Barclays Capital, adding that while China's industrial output and retail sales figures were slightly better than expected, local currency loans fell in October.
Loans are a focal point, since they have been seen as a driver of China's domestic demand-led economic recovery, and a factor behind fund flows into China's stock market, Yamamoto said.
The dollar index dipped 0.1 percent to 74.981 after earlier hitting its lowest since August 2008.
The dollar slipped 0.2 percent against the yen from late U.S. trading on Tuesday to 89.60 yen.
Earlier, the dollar fell to as low as 89.46 yen on trading platform EBS, with traders saying the dollar extended its losses against the yen after triggering some stop-loss dollar selling and yen buying.
The Australian dollar rose as high as $0.9325, nearing its October peak of $0.9330, which was the highest since August 2008.
Market players said the U.S. dollar was out of favour as investors expect interest rates to remain near zero into 2010 as the economy recovers from a harsh recession.
Several Federal Reserve officials seemed to back that view on Tuesday, striking a cautious note on the U.S. economic outlook..
"The dollar index is entering a new world, and the question is whether there will be more dollar selling from here," said Akira Hoshino, chief manager for Bank of Tokyo-Mitsubishi UFJ's foreign exchange trading department.
"Since U.S. monetary policy is the fundamental basis for dollar-selling, until people get the sense that they are really going to do it (raise interest rates), it will be hard to buy the dollar," Hoshino said.
The euro held steady against the dollar at $1.4989.
Option barriers are lurking around $1.5025 levels while buyers are lined up at $1.4950.
Meanwhile, sterling dipped 0.1 percent to $1.6722, having tumbled to as low as $1.6600 on Tuesday after Fitch ratings agency told Reuters that Britain was the economy most at risk of losing its top AAA credit rating.
U.S. Treasury Secretary Timothy Geithner said on Tuesday it was important to U.S. economic health to maintain a strong dollar, but the initial market reaction was muted. (Additional reporting by Anirban Nag in Sydney; Editing by Michael Watson)