* Yen up as speculators book profits on rally in dollar, euro
* Dollar under pressure vs euro as risk appetite warms
By Rika Otsuka
TOKYO, May 29 (Reuters) - The yen rose on Friday, climbing from a two-week low against the dollar and a seven-week trough versus the euro hit the previous day when Japanese retail investors shifted funds to overseas assets on hopes the worst of the global recession is over.
The dollar also edged down against the euro, staying under pressure after strong U.S. durable goods data on Thursday prompted investors to trim holdings of the safe-haven currency.
The yen got a lift from news on Friday that Japan's industrial output jumped 5.2 percent in April, more than expected and the second straight month of increase.
Traders said the yen was getting more help from speculators who booked profits on the previous day's rally in the dollar, euro, Australian dollar and sterling against the Japanese currency.
"The firmness in stocks has boosted Japanese retail investors' risk appetite," said Tsutomu Soma, a senior manager in the foreign securities department at Okasan Securities, adding that household investors' money is also flowing out of the country through pension funds.
"Profit-taking in overseas currencies may temporarily lift the yen, but the downward trend in the yen is likely to stay intact," Soma said.
The dollar fell 0.4 percent from late U.S. trade to 96.44 yen. It rose as high as 97.24 yen on trading platform EBS on Thursday, its highest in more than two weeks and well above a two-month trough of 93.85 yen reached last week.
The euro slipped 0.3 percent to 134.65 yen. It hit a seven-week peak of 135.30 the previous day when it finished up 2.4 percent.
Against the dollar, the European single currency was up 0.1 percent to $1.3958, crawling towards the key $1.40 mark. (Editing by Michael Watson)