FOREX-Euro dips ahead of banks' stress test results, sterling firm

(Updates, adds fresh details)

* European bank stress test results awaited

* Sterling rises after Q3 UK GDP data

* Yen firm on safety bids after NY doctor tests positive for virus

By Anirban Nag

LONDON, Oct 24 (Reuters) - The euro slipped against the yen on Friday, with investors cautious ahead of the results on Sunday of stress tests on euro zone banks, with the single currency also lagging the pound after robust third-quarter UK growth data.

Sterling gained after figures showed the British economy growing in line with forecasts and at a healthy pace, providing relief for those worried that weakness overseas, especially in the euro zone, could drag more on activity.

The euro was down 0.1 percent at 78.85 pence and shed 0.1 percent against the yen to trade at 136.84. Against the dollar, the euro was steady at $1.2650, having hit a two-week low of $1.2614 on Thursday.

The euro zone's 130 biggest banks received the European Central Bank's final verdict on their finances on Thursday after a review aimed at drawing a line under persistent doubts about the health of the region's banking sector. They will not be made public until 1100 GMT on Sunday.

Generally investors are expecting few failures and surprises, especially amongst household names, but going into the weekend, most preferred to be cautious about the euro.

"Evidence that a significant number of banks -- say more than 15 percent of total, among them large European lenders -- failed, and the capital shortfall is substantially above consensus of 25 billion euros, could fuel concerns about future credit growth and the economic outlook, weighing on the euro," said Valentin Marinov, currency strategist at Citi.

"If only a handful of smaller banks fail and the capital shortfall does not exceed market estimates, this may help euro stabilise. The longer-term risks for euro could remain on the downside, however."

YEN FIRM

The yen was helped by safe-haven bids after news that a doctor had tested positive for the Ebola virus in New York City after returning from West Africa.

The first confirmed case in the city worried investors because of the possible repercussions in the global financial centre, although some said the market focus could soon shift.

"The volatile move was a good chance for some to buy the dollar on dips," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.

"I think, next week the market will be more event-driven, with the FOMC and the Bank of Japan, so the downside should be limited," he said, adding that dollar support at 107 yen was likely to hold for now.

The greenback was about 0.1 percent lower at 108.15 yen after earlier dropping as low as 107.86 yen.

The U.S. Federal Reserve will meet next Tuesday and Wednesday, and the consensus view is that it will wrap up asset purchases under its third round of quantitative easing.

The Bank of Japan appears set to resist pressure for more stimulus measures, or to accept its inflation target is unrealistically high, at its next policy meeting on Oct. 31, people familiar with its deliberations have told Reuters.

The yen had faced overnight pressure after a Wall Street Journal report sparked talk of more easing. The article, citing people familiar with the Japanese central bank's thinking, said the BOJ saw "a much bigger possibility of inflation slipping below 1 percent" due to falling oil prices.

Sterling rose against the dollar to $1.6040, after the GDP data showed Britain's economy grew by 0.7 percent in the third quarter, down from 0.9 percent the quarter before, but in line with economists' expectations.

Money markets continue to price in a first interest rate rise by the Bank of England around the middle of next year, potentially the first post-crisis hike by any big central bank. (Additional reporting by Lisa Twaronite; Editing by Catherine Evans)