FOREX -Yen rises after Japan PM's comments, German data hurts euro

* Japan PM Abe: weaker yen can burden households, small firms

* BOJ's Kuroda shows no urgency to ease policy further

* Euro back under pressure after weak German data (Updates prices, adds comments)

By Anirban Nag

LONDON, Oct 7 (Reuters) - The yen rose on Tuesday after Japanese Prime Minister Shinzo Abe spoke about the disadvantages of a weaker currency, with its gains against the euro also driven by a sharp drop in German industrial output.

Speaking in parliament, Abe said a weaker yen burdens households and small firms by pushing up their fuel costs.

Giving the yen another boost were comments from Bank of Japan Governor Haruhiko Kuroda, who told a news conference there was no need to adjust monetary policy if the bank's inflation goal of 2 percent can be met in the middle of the financial year starting next April.

The dollar fell 0.3 percent to 108.45 yen from an intraday high of 109.25 yen, pulling away from a six-year high of 110.09 yen set last Wednesday ahead of Friday's robust U.S. jobs data.

The euro was down 0.4 percent at 137.10 yen, not far from a one-month low of 136.875 yen hit earlier in the day.

"Kuroda's comments suggest the BoJ is unlikely to ease policy anytime soon. So we are seeing some profit taking in long dollar/short yen positions," said Yujiro Goto, currency strategist at Nomura.

"We are seeing quite a few politicians talking against the yen's recent weakness but we do not expect them to do much other than perhaps announce fiscal measures to soften the blow."

Abe told parliament a weaker yen would help exporters but hurt importers of raw materials, including almost all Japan's energy needs. He has faced criticism in parliament over the slide in the currency as the central bank pumps out yen in a bid to stimulate inflation.

Since coming to power in December 2012, Abe has overseen massive fiscal and monetary stimulus policies to revive the stagnant economy.

The Bank of Japan left its policy unchanged as expected on Tuesday. It maintained its huge asset-buying programme but offered a bleaker view on factory output, following signs that the world's third-largest economy was hit harder than expected by a sales tax hike in April.

POOR GERMAN DATA

The single currency came under pressure early in London trade after German data showed a 4.0 percent month-on-month drop in industrial output, far below the consensus forecast in a Reuters poll for a 1.5 percent fall and well short even of the lowest forecast. It was the biggest drop since January 2009.

"The German figure fell by more than expected.... adding more evidence to the slowdown in what's supposed to be the engine of growth in Europe," said Marshall Gittler, head of global FX strategy at IronFX Global.

As a result, German bond yields slid to near record lows with expectations of further monetary stimulus very much alive.

The euro eased against the dollar to $1.2645, giving back some of the gains it made on Monday when the euro rose 1.1 percent. The euro has pulled up from a two-year low of $1.2500 set on Friday.

The Australian dollar briefly sagged earlier after the Reserve Bank of Australia said the currency remains high by historical standards.

The RBA kept interest rates unchanged at a record low of 2.5 percent, as had been widely expected, and said it was prudent to have a period of stability for interest rates.

The Aussie dollar touched an intraday low of $0.8727 after the RBA's post-meeting statement. It later erased its losses and was last up 0.4 percent on the day at $0.8799. (Additional reporting by Masayuki Kitano; Editing by Hugh Lawson (Other OTC: LWSOF - news) )