FOREX-Yen soars to 15-year high; dollar rises vs others

* Dollar hits 15-year low vs yen at 84.72 yen

* U.S. 2-yr yields fall after Fed steps to revive economy

* Euro, riskier FX fall as equities lose ground (Updates prices, adds quote, changes byline, changes dateline, previous LONDON)

By Wanfeng Zhou

NEW YORK, Aug 11 (Reuters) - The U.S. dollar fell to a 15-year low against the yen on Wednesday as U.S. government debt yields fell, while a gloomier outlook from the Federal Reserve and slower Chinese factory growth dented risk appetite.

Yields on two-year Treasury debt hit a record low after the U.S. central bank said on Tuesday it would use cash from maturing mortgage bonds to buy more government debt to revive a faltering U.S. economic recovery.

The greenback, however, rallied against other major currencies as world stocks fell, prompting investors to flock to the safe-haven dollar for safety.

"The consensus is that as major economies around the world show reduced growth, this is being perceived negatively for stocks. As stocks go down in value, investors are pulling out and this is proving positive for the U.S. dollar and yen," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

The dollar dropped to 84.72 yen on electronic trading platform EBS, after taking out option barriers at 85.00 and 84.75, fueled by a narrowing of the spread between U.S. and Japanese two-year yields.

Japanese Finance Minister Yoshihiko Noda said on Wednesday that he was closely watching forex markets [ID:nTKX006931], but analysts doubted his rhetoric would escalate into currency intervention to weaken the yen.

"Japan needs the support of the U.S. and Europe to intervene, but the Fed and the European Central Bank are focused on other problems right now so I don't think it is possible at these levels," said Manuel Oliveri, currency analyst at UBS in Zurich.

"I see no upside for dollar/yen right now and I can see it falling towards 80 yen," said Oliveri.

The record low in dollar/yen was hit in April 1995 around 79.75 yen.

The yen gained across the board, with the euro down more than 2 percent at 110.11 yen and the Aussie losing 1.8 percent.

The ICE Futures U.S. dollar index, which tracks the greenback versus a basket of six currencies, rose 1.3 percent to 81.861 <.DXY>, after touching a high of 81.952, its strongest since late July.

The euro lost 1.6 percent to $1.2962.

"The market's reaction is that if the U.S. economy is slowing materially it will not be in isolation and it has therefore responded by selling risk instead of selling the dollar," said Adam Cole, currency strategist at RBC Capital Markets.

Elsewhere, sterling fell more than 1 percent against the dollar after the Bank of England said UK inflation would fall well below its 2 percent target in two years even if interest rates stay low. [nKING] (Additional reporting by Neal Armstrong in London; Editing by Chizu Nomiyama)