The euro and Australian dollar edged up against the yen but stayed near recent lows on Wednesday, after a heavy round of leveraged trade unwinding, while the euro was also within range of a record low on the safe-haven Swiss franc.

While doubts about a global recovery were playing out, traders said, the rush toward safe-haven currencies may prove to be short lived once quarter-end hedging and repatriation flows have dried up, although the euro remained vulnerable longer term.

Some said real money investors had sold riskier currencies and equities, while moves were exaggerated by thin trading conditions and some of the selling may have been overdone.

The euro got a bit of a lift from light short-covering from Middle East investors and an Asian real money account, one dealer said, but chartwise needed to hold above $1.2145-55 and then $1.2110 to avoid a slide toward its four-year low at $1.1876.

Focus is on a three-month tender by the European Central Bank ahead of the expiry of a 12-month operation on Thursday when euro zone banks must repay 442 billion euros ($539 billion) borrowed at low rates as part of ECB efforts to boost liquidity.

The market is waiting to see what the take-up at the three-month operation will be and what that would signify for the funding situation at European banks. Investors fear Thursday's expiry could leave some banks facing a liquidity shortfall.

The event risk is probably overdone. Yes there is a risk that a huge number would worsen sentiment but it would have to be a large number in the region of 350-400 billion euros to have a lasting effect, said Robert Ryan, FX strategist at BNP Paribas in Singapore.

But at this stage everybody knows the banks are reliant on the ECB.

Barclays said in a note it expected 250-300 billion euros of the one-year funding to be rolled over into the three-month operation.

This would signal modest demand for short-term financing, and would likely be positive for risky currencies after press reports had suggested some banks were struggling to gain access to short-term financing, which Barclays said meant consensus forecasts about demand had probably risen.

The euro edged up 0.2 percent to 108.15 yen but remained well within sight of its 8- year low of 107.30 yen on trading platform EBS struck on Tuesday.

Against the Swiss franc, it clawed 0.2 percent higher to 1.3213 francs after hitting a lifetime low of 1.3165 on Tuesday. It is down nearly 11 percent on the franc this year.

The Australian dollar gained 0.4 percent to 75.32 yen after a drop of nearly 4 percent on Tuesday and was 0.2 percent up on the dollar at $0.8508 after falling more than 2.5 percent in the previous session.

Support for the Aussie is seen at $0.8465, a 50 percent retracement of its rise from $0.8066 to $0.8860 in May and June.

There's still very little liquidity in the markets. Hedge funds are still licking their wounds after some very nasty moves in May so all these turns in sentiment are being exaggerated by a lack of liquidity, Ryan said.

Dollar/yen was soft at 88.54 yen, having lost nearly 1 percent on Tuesday as the rush to safety pushed U.S. two-year Treasury yields to record lows.

Support is seen at around 88.00 yen, the low struck on May 6, with one dealer citing talk of options in the 87.95-88.15 yen region due to expire later on Wednesday.

An official at a Japanese FX margin broker said there was talk of bids in dollar/yen from real money investors near 88.00 yen and short-covering interest around that level but with stop-loss sell orders then expected below that figure.

The dollar also got some support from Japanese importers, a trader said, with current levels possibly looking attractive to Japanese investors, especially as Japanese authorities may start trying to talk the yen lower if the dollar neared 85.00 yen.

Others said the dollar could benefit from month-end buying after a fall in Wall Street .SPX this month left many non-U.S. investors needing dollars to rebalance their portfolios.

It is worth emphasizing that the fall in global equities this month biases today's month-end fix toward U.S. dollar buying, JP Morgan said in a morning note.

The rationale is threefold -- non-U.S. investors hedge global equity exposure more than U.S. investors do; a fall in U.S. equities during the month leaves non-U.S. investors overhedged on their S&P holdings; thus hedge rebalancing requires dollar purchases at the fix.

The S&P-500 index has lost over 4 percent this month and was looking increasingly bearish on the charts.

The dollar index .DXY was flat at 86.018, with resistance expected in the 86.42 to 86.48 region. The latter is the 38.2 percent of the index's decline from a high of 88.71 to its recent low of 85.09.

The euro edged up 0.2 percent to $1.2213, though was still not far from a two-week low near $1.2150 struck the previous day.

It has support at $1.2145-55, a pivot area stemming from intra-day lows and highs in May and June, and then at about

$1.2110, the 61.8 percent retracement of its move up from $1.1876 to near $1.2500 in June.

Resistance sits near Wednesday's high of $1.2224 but with a move through $1.2250-70 needed to negate short-term bearishness.

(Additional reporting by Anirban Nag and Reuters FX analyst Krishna Kumar in Sydney and Masayuki Kitano and Rika Otsuka in Tokyo; Editing by Joseph Radford)

BNP Paribas