* Yen dips but well-supported as risk appetite low
* Investors hesitate to return to riskier assets
* Caution before major U.S. banks reports next week
TOKYO, April 9 (Reuters) - The yen slipped against the dollar on Thursday but remained well-supported as investors hesitated to return to riskier assets ahead of earnings reports by major U.S. banks next week and the Easter holiday weekend.
Volatility in stock markets is keeping investor risk appetite low, prompting investors to cut bets they had built in past weeks on higher-yielding currencies like the Australian dollar and helping the yen recover from multi-month lows hit this week.
Financial sector woes continued to dominate market thinking.
"The market is awaiting to see if it can override problems in the financial sector and keep yen-short positions, while news about a delay of bank stress test results raised some concerns," said Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJ Trust Bank.
The U.S. government is testing how the largest U.S. banks would fare under more adverse economic conditions than are expected, in an attempt to assess the firm's capital needs.
But the U.S. Treasury is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season, in order to avoid complicating stock market reaction, a source familiar with the Treasury's discussion said on Tuesday.
Concerns about the health of the financial system also flared up again this week on a report that new forecasts from the International Monetary Fund are set to suggest that toxic debt racked up banks and insurers could spiral to $4 trillion.
The dollar rose 0.2 percent to 99.92 yen. It rose as high as 101.45 yen on Monday to strike a six-month peak.
The euro fell 0.2 percent to 132.26 yen, well off a six-month high of 137.42 yen hit earlier this week. It dropped 0.3 percent to $1.3238.
Data on Thursday showed Japan's machinery orders, a leading indicator of corporate spending, unexpectedly rose in February, a rare positive sign as the country suffers its worst recession since World War Two.
The figure will be welcome news for a government in the throes of finalising a $150 billion stimulus package, which traders said had helped the yen's rebound against the dollar and the euro in the past few days.
But traders said investors would also refrain from pushing the yen higher over caution about the extent of the stimulus plan's effects.
Wall Street rose on Wednesday but seesawed as invstors weighed news of possible government aid for some life insurers against the prospect of more poor corporate earnings.
Tokyo stocks were up 2 percent in morning trade, boosted in part by the better-than-expected machinery orders data. (Editing by Edwina Gibbs)