TOKYO, Mar 1 The dollar recovered from a 10-week low against yen on Thursday following a

TOKYO, Mar 1 (Reuters) The dollar recovered from a 10-week low against yen on Thursday following a rebound U.S. stocks the previous session as investors felt the sharp sell-off in risky assets this week may have run its course.

Comments by Federal Reserve Chairman Ben Bernanke the previous day that it is ''reasonable'' to expect stronger growth later in the year also gave support to the U.S. currency despite a spate of weak economic data.

The yen surged on Tuesday as a shakeout in stock markets around the world prompted investors to reverse some of their big short positions in the low-yielding Japanese currency, driving the yen up for its largest one-day gain in 14 months.

''With the fall in U.S.stocks stopping and credit spread shrinking, we see risk asset markets started to stabilise.

Bernanke's comments also gave some confidence to the market, '' said Koji Fukaya, a senior currency strategist at Deutsche Bank in Tokyo.

''Delayed yen short-covering may still cap the dollar's gain, but the currency will likely recover to where it was before,'' Fukaya said.

Investors were keeping a close eye on the performance of shares, with Tokyo's benchmark Nikkei average falling 0.5 percent in early trade a day after tumbling nearly 3 percent.

The dollar rose to around 118.85 yen near highs hit overnight and climbing back towards a four-year high of 122.20 yen reached in January. On Tuesday, the dollar fell as far as 117.50 yen, its weakest since Dec 15.

The euro also gained to 157.07 yen from near 156.86 yen in late New York trade. The single European currency was little changed near $1.3225 REUTERS DH RN0629