FOREX-Euro extends gains on better PMI data, stocks

LONDON, April 23 (Reuters) - The euro extended gains against the dollar and the yen on Thursday, helped by data giving tentative signs that the euro zone economy may be emerging from the worst of the recession and gains in equity markets.

Purchasing managers' surveys showed the euro zone's manufacturing and services sector had their best performance in six months, while industrial orders fell by less than analysts had feared.

Sentiment was also helped as European stocks rose 0.2 percent .FTEU3, shaking off earlier losses, while U.S. stock futures SPc1 DJc1 pointed to gains on Wall Street later in the day.

Analysts said there has been some stabilisation in risk sentiment, helped by the view that the global economy may be over the worst, that has boosted the euro along with currencies viewed as higher risk such as sterling and the Australian dollar.

However, caution ahead of the results of "stress" tests on U.S. banks and worries about a sizeable deterioration in the fiscal health of some of the world's biggest economies was helping to limit any rebound in riskier assets, they said.

"There has been a broad stabilisation in financial risk premia in currency markets," Tullett Prebon G7 market economist Lena Komileva said.

"There is a general belief that global growth is stabilising that has been supported by the stronger euro zone PMI data," she said, but added there is "not a lot of confidence behind this".

At 1002 GMT, the euro rose 0.5 percent against the dollar to $1.3065 , having hit a session high $1.3071, and jumped by 0.8 percent against the yen to 128.44 yen .

The common currency was well above a low of $1.2885 against the dollar hit on EBS trading systems on Wednesday, which was its weakest since March 16.

Traders noted, however, that a large options expiry at $1.3000 in euro/dollar due later on Thursday may be preventing the pair from moving too far away from that level.