FOREX-Yen firms, Aussie slips on China growth worries

* Yen hits 11-month high vs Australian dlr, stays broadly firmer

* China official PMI falls below 50 for first time in over 2 years

* China PMI, fall on Wall St adds to risk-off mood

By Ian Chua

SYDNEY, Feb 2 (Reuters) - The yen firmed broadly early on Monday, while commodity currencies softened as worries about the health of the Chinese economy dealt a fresh blow to sentiment already unsettled by a selloff on Wall Street.

The dollar slid to a two-week low of 116.64 yen, down from around 117.52 late in New York on Friday. It has since steadied at 117.17. The euro reached a one-week trough of 132.00 yen, while the Australian dollar plumbed an 11-month low of 90.64 yen.

Investors had already warmed to the safe-yen Japanese currency last Friday after the U.S. economy slowed in the fourth quarter, driving Treasury yields to new lows.

Yen demand was sustained by a report on Sunday showing activity in China's factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January.

"The weaker China PMI is likely to reinforce the market's current negative bias towards commodity currencies and those linked closely to the China growth story," said Jonathan Cavenagh, currency strategist at Westpac.

Adding to the downbeat mix, Wall Street is increasingly worried about corporate earnings and Greece is yet to persuade a sceptical Europe to accept a new debt agreement.

"We believe that the likelihood of a Greek exit is now significantly higher than at any point in 2012, in view of the latest political events," analysts at Barclays (LSE: BARC.L - news) wrote in a note to clients.

While there was no renewed push to sell the euro, investors saw no reason to buy it either, leaving the common currency languishing just above an 11-year trough of $1.1098 set a week ago. The euro last traded $1.1317.

The market also gave commodity currencies a wide berth given the importance of China as a key market for many resource-exporting countries like Australia.

A recent surprise cut in rates by the Bank of Canada and a dovish turn by New Zealand's central bank, were also keeping buyers at bay.

Even (Taiwan OTC: 6436.TWO - news) an 8-percent surge in oil prices on Friday failed to give much lift to the loonie, which continued to hover near a six-year trough of C$1.2800 on the U.S. dollar.

Analysts suspect Australia's central bank will be next to jump on the dovish bandwagon. The Reserve Bank of Australia board meets on Tuesday and many suspect it'll either lower the cash rate by a quarter point to 2.25 percent or lay the groundwork for an easing in coming months.

Given the circumstances, speculators have built large short positions in the Australian dollar, which slumped to a six-year trough of $0.7720 last week. It was last at $0.7771.

The focus in Asia remains on China with a private survey on China's manufacturing sector due at 0145 GMT. This will be followed by a slate of PMIs for many euro zone members. (Editing by Shri Navaratnam)