* Risk aversion and repatriation flows boost yen
* Ratings agency comments weigh on sterling, euro
(Recasts, updates prices, adds comment, changes dateline, previous LONDON)
NEW YORK, March 9 (Reuters) - The yen gained across the board on Tuesday as most world equity markets fell, illustrating a rise in risk aversion as investors moved into the low-yielding Japanese currency.
Appetite for risk had been boosted by Friday's better-than- expected U.S. employment report, pushing the yen down to two-week lows versus the euro and the dollar.
But the change in sentiment on Tuesday prompted a reversal for the yen, though the dollar was supported after China said it was committed to buying U.S. Treasuries.
The combination of today's risk-averse trading and repatriation of yen have been the key drivers over the last 12 hours, said Camilla Sutton, currency strategist at Scotia Capital.
Traders said Japanese exporters were in the market buying yen fairly actively, with further demand for the Japanese currency likely in the run-up to fiscal year-end on March 31.
The feeling is that we are beginning to see fiscal year-end repatriation flows for Japan. I think the yen will remain in favor over the next few weeks as Japanese corporates bring money back home, said RBC currency strategist Adam Cole.
Further yen gains could however be limited by speculation that the Bank of Japan may take additional steps to ease monetary policy. The BOJ is in the spotlight after the Nikkei newspaper reported on Friday that the central bank was examining easing again and may decide on such a move when it meets on March 16-17.
In early New York trade, the dollar/yen JPY= was trading down 0.6 percent at 89.70 yen.
The yen was up 0.9 percent against the Canadian dollar JPYCAD=R, 1.2 percent against the Swiss franc JPYCHF=R, 1.2 percent against the euro JPYEUR=R and 1.4 percent against the pound JPYGBP=R.
Higher-yielding currencies such as the Australian dollar also fell against the Japanese currency. Aussie/yen AUDJPY=R slipped 0.9 percent.
The dollar index .DXY, a non traded calculation of the dollar's performance against a basket of currencies, was up 0.5 percent at 80.814.
China, the world's biggest holder of foreign exchange reserves, renewed its commitment to the U.S. Treasury market on Tuesday. [ID:nSGE628044].
The comments from the China's State Administration of Foreign Exchange should provide the U.S. dollar with an added tone of support in the near term, Sutton said.
The pound was under widespread pressure, dropping to a one-week low versus the dollar GBP= after UK ratings agency Fitch said Britain's sovereign credit profile had deteriorated. [ID:nWEB4580]
Earlier, a Moody's Investors Service report saying Britain faces a difficult balancing act in deciding how and when to reduce support for the banking sector had also weighed on the pound. [ID:nLDE6271OB]
Against the dollar the pound was down around 0.8 percent at $1.4943.
The euro was down around 0.6 percent against the dollar EUR= at $1.3545, continuing to struggle in the face of debt concerns in peripheral euro zone countries such as Greece and Portugal.
Fitch Ratings said on Tuesday it still has a negative outlook on Portugal's AA ratings and was studying the details of the country's new austerity measures announced a day earlier. [ID:nWEB4632].
Even though Fitch also stated that the contagion risk to Portugal and Spain from Greece is not great, there are sufficient worries in the market concerning EMU to keep the euro on the back foot, said FOREX.com analysts in a note.
Greece has been a drag on the euro in 2010, which has lost 5.4 percent against the dollar so far this year and 8.6 percent against the yen. (Reporting by Nick Olivari; additional reporting by Neal Armstrong in London; Editing by Padraic Cassidy)