* Yen gains as Asian stocks fall, dollar slips
* Higher yielders fall vs yen
* White House to reappoint Bernanke as Fed chief on Tuesday
By Charlotte Cooper
TOKYO, Aug 25 (Reuters) - The yen headed higher on Tuesday as share markets fell and investor interest in higher-yielding currencies ebbed, while currencies took in their stride news that Federal Reserve chief Ben Bernanke would be reappointed.
A U.S. administration official said President Barack Obama would reappoint Bernanke for a second term as Fed chairman on Tuesday.
The dollar showed little reaction to the news as market participants had thought there was a good chance Bernanke would be given a second term to reassure financial markets as they recover from the global economic crisis, analysts said.
"I don't think there will be any major impact, but it should be positive for markets such as the stock and bond markets in the sense that an element of uncertainty has been removed," said Takahide Nagasaki, chief FX strategist at Daiwa Securities SMBC.
Currencies are still watching share markets for a guide to investor appetite in riskier assets.
Asian stocks fell broadly after a lacklustre day on Wall Street, with Tokyo shares dipping 0.7 percent and MSCI's measure of Asian equities excluding Japan slipping 0.8 percent.
Shanghai's share index fell 4 percent after Chinese Premier Wen Jiabao said China would keep monetary policy loose as the economy faces fresh difficulties.
The low-yielding yen tends to gain when stocks and higher-yielding currencies fall or when weak economic data highlights a long and uncertain road for global recovery.
"The lack of upward momentum in equities and risky currencies may reflect a degree of fatigue and simply a lot of the good news is in the price," said a trader at a European bank in Tokyo.
"It is pretty clear monetary policy will be supportive with little risk of genuine policy tightening for some time in the major economies."
The dollar fell 0.7 percent on the day to 93.96 yen, though it remained above last week's one-month low at 93.42.
Dealers noted the spread between the three-month dollar and yen London interbank offered rates had inverted for the first time in 16 years, with the dollar interbank rate dropping to a fresh record low of 0.38688 percent on Monday and the yen rate standing at 0.38875 percent.
A trader said the Libor rates were not affecting dollar/yen as such but the pair were sensitive to rate changes because both had official rates close to zero.
Another trader, for a Japanese bank, said the impact of the three-month Libor inversion on dollar/yen was limited partly because interest rates on longer-term instruments such as U.S. Treasuries remained higher than comparable Japanese government bond yields.
For example, two-year U.S. Treasury yields now yield 1.025 percent, about 78 basis points above two-year JGB yields.
The euro fell 0.7 percent to 134.30 yen, and the Australian dollar dropped 0.8 percent to 78.53 yen after climbing to its highest in a week on Monday, just below 80.00 yen.
The Aussie also slipped 0.2 percent to $0.8362, but the New Zealand dollar rose 0.1 percent to $0.6850, holding close to this month's 11-month high at $0.6888.
The euro edged down 0.1 percent to $1.4292.
The Standard & Poor's Case/Shiller report on U.S. house prices for June is due for release later, as is a report on U.S. consumer confidence in August.
Both will be watched for clues about the economic recovery.
The market will also be watching an auction of $42 billion of two-year U.S. Treasuries, the first of three U.S. Treasury auctions slated for this week.
Analysts say a tepid response could highlight the vulnerability of the United States' fiscal position and might be a drag on the greenback. (Additional reporting by Masayuki Kitano in TOKYO and Anirban Nag in SYDNEY; Editing by Chris Gallagher)