* Japan exporters and fund repatriation support yen
* Euro steadies as market takes breather from volatility
* Parliamentary votes on EFSF still ahead
* Model funds cited selling Aussie dollar
By Masayuki Kitano
SINGAPORE, Sept 28 (Reuters) - The yen rose on Wednesday, buoyed by Japanese fund repatriation and buying by Japanese exporters, while the euro dipped as investors waited to see whether European policymakers will push ahead with reforms to the euro zone's rescue fund.
Yen-buying flows ahead of the quarter-end and the end of Japan's financial half-year gave a lift to the Japanese currency and weighed on the euro and the dollar.
Traders said Japanese exporters were spotted selling both the dollar and the euro against the yen. Traders also cited euro selling by Japanese investors repatriating proceeds gained from coupon payments on their foreign bond holdings.
The single currency fell 0.5 percent against the yen to 103.88 yen , paring some of the previous day's gains, when it climbed 1.1 percent. The euro had hit a decade-low versus the yen near 101.95 earlier in the week.
In addition to the yen-buying flows ahead of the quarter-end, profit-taking was likely weighing on euro/yen as well, said Tsutomu Soma, senior manager at Okasan Securities' foreign securities department in Tokyo.
"There seems to be a fear among market players that it (euro/yen) will head lower, and so they are eager to sell into any bounce," Soma said.
The single currency dipped 0.1 percent to $1.3572 , pulling away from the previous day's high of $1.3669. The common currency has lost 5.6 percent so far this month but is off an eight-month low of $1.3360 hit on Monday.
Talk of proposals to leverage up the 440 billion euro bailout fund to multiply Europe's financial firepower lifted the euro and global equities on Tuesday.
Traders cited a Financial Times report that a split had opened over Greece's bailout terms, in a clear reminder of the many hurdles laying ahead for euro zone officials. Dealers suspect the bounce in risky assets on Tuesday was merely a temporary correction ahead of a fresh wave of risk aversion.
"Today's rebound could easily give way at some point," said ANZ in a research note.
"We saw a late reversal of some of last night's big risk on moves on reports that European leaders were not completely united on the planned policy response."
Offers in the euro were seen around $1.3620 to $1.3650 and after that at $1.3710, while stop-loss bids were said to be lurking in the $1.3670 to $1.3680 area.
Technically, as long as the euro was stuck below $1.3670/1.3710 resistance the risk was for a break of $1.3540/.50 support and, more importantly, $1.3470 for a move to new lows in the $1.3250/00 area.
"Unless you can predict which euro zone policy maker will say what and when, it's too scary to trade the euro," said a trader for a Japanese bank in Tokyo.
Finland will vote on the enlargement of the EU rescue fund, EFSF, agreed back in July later on Wednesday, while Germany's parliament votes on Thursday.
The Australian dollar dipped 0.2 percent to $0.9871 , having backed away from the previous day's high of $0.9986. It struck a 10-month trough of $0.9622 earlier in the week. Selling by model funds helped drag the Australian dollar lower, traders said.
The U.S. dollar fell 0.3 percent against the yen to 76.56 , not far from a record low of 75.941 yen hit in August on trading platform EBS.
There has been some speculation that Japan could intervene this week ahead of the end of its financial half-year, to offer some relief to Japanese exporters, which have been stung by the dollar's 5.8 percent drop versus the yen so far in 2011.
Soma at Okasan Securities said that while yen-selling intervention may be a possibility, it would probably only happen if moves in the yen turned particularly violent.
"If the dollar falls below its record low near 75.95 yen, triggers some stops and the move becomes volatile, I think there is the possibility of another one-off intervention," he said.
Federal Reserve Chairman Ben Bernanke gives a speech at 2100 GMT and might offer some reaction to the market's mostly negative response to last week's Operation Twist.
Any hint that even more easing is possible could help underpin risk appetite. (Additional reporting by Antoni Slodkowski and Hideyuki Sano in Tokyo, Cecile Lefort in Sydney and Reuters FX analyst Rick Lloyd in Singapore) ((masayuki.kitano@thomsonreuters.com +65-6417-4682)(RM:masayuki.kitano.thomsonreuters.com@reuters.net )