TOKYO, Aug 28 (Reuters) The yen rose against the dollar and euro on Tuesday as a fall in U.S. stock

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TOKYO, Aug 28 (Reuters) The yen rose against the dollar and euro on Tuesday as a fall in U.S. stocks the previous day after a batch of weak housing data further stoked worries about rocky credit markets, prompting investors to trim risky assets.

Japan's Nikkei share average fell 0.5 percent, tracking the drop on Wall Street after a report showing unsold U.S. homes reached a nearly 16-year high in July, adding to concerns about the housing market and consumer spending.

''Weaker U.S. shares helped the yen as credit jitters persist,'' said a senior trader at a Japanese brokerage.

Problems in credit markets due to losses tied to U.S.

subprime mortgages sparked a wave of risk aversion earlier this month, causing higher-yielding currencies to fall while boosting the yen sharply as investors rushed to unwind carry trades.

But the yen has given up some gains since central banks worldwide pumped cash into banking systems to relieve the squeeze in money and credit markets, which helped revive investor risk appetite.

The euro remained on the back foot after European Central Bank President Jean-Claude Trichet said on Monday that his comments on policy on Aug. 2 were made before the market turbulence, stirring doubts about the possibility of a September interest rate rise.

At the early August press conference, Trichet used the phrase ''strong vigilance'', which typically signals a pending rate hike.

In early Asian trade, the dollar slid to 115.56 yen from 115.85 yen in Monday's late U.S. trade.

The euro edged down to $1.3633 from $1.3645. Against the yen, the European single currency fell to 157.55 yen from 158.10 yen.

The high-yielding Australian dollar was down 0.25 percent to $0.8255 Reuters RKM VP0620

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