* Euro hits 2-month high vs yen of 127.64 <EURJPY=R>
* European shrs up 2 pct, helping euro/dlr to 2-1/2 wk high
* Euro remains firm vs Swiss franc after SNB action
* Focus now on Japan, though yen intervention not expected
(Updates prices, changes byline, dateline; previous TOKYO)
By Jessica Mortimer
LONDON, March 13 (Reuters) - The euro jumped to a two-month high against the yen and reached a 2-1/2 week high against the dollar on Friday, helped by solid gains on equity markets.
Gains against the yen were also helped as the market digested the Swiss National Bank's action to weaken the Swiss franc.
European shares jumped 2 percent .FTEU3 and were on course for a fourth consecutive day of gains, following data showing U.S. retail sales fell much less than forecast in February, which also encouraged investors to pull out of the perceived safety of the dollar.
The euro also stayed close to an earlier two-month high against the Swiss franc after the SNB said on Thursday that it was buying foreign currencies against the franc in a bid to stave off deflation.
Though most analysts see it as unlikely, people are questioning whether Japanese authorities will opt for a similar policy of combining unconventional monetary policy measures with intervention in foreign exchange markets.
"After the SNB move there is more and more focus on the BoJ. The BoJ has intervened before and Japan has a big problem of dramatically falling exports and a very strong currency," Commerzbank currency strategist Antje Praefcke said.
At 0909 GMT, the euro rose 0.2 percent to $1.2933 <EUR=>, just below an earlier 2-1/2 week high of $1.2956, as several days of equity market gains helped spark a slight ebbing in the market's aversion to risk.
"Overall risk aversion remains high, but several days of big stock gains have helped pull it back for now," Praefcke said.
Strong gains in the euro recently have taken the single currency's trade-weighted index <EUREER=ECBF> to its highest level in two months.
Against the yen, the euro rose 0.9 percent to 127.36 yen <EURJPY=R>, just below an earlier two-month high of 127.64 yen, Reuters charts showed.
The dollar was also firmer against the Japanese currency, rising 0.7 percent to 98.44 <JPY=>.
Against the Swiss franc, the euro gained 0.2 percent to 1.5340 francs <EURCHF=>, having earlier touched a two-month high of around 1.54 francs on the EBS trading platform.
The single currency had surged over 3 percent on Thursday after the SNB action.
FOCUS ON BOJ
Japanese authorities have not intervened in the foreign exchange market since March 2004 after a 15-month, 35 trillion yen ($359 billion) selling spree aimed at preventing a strong yen from snuffing out an economic recovery.
Masahiro Sato, joint general manager of the treasury division at Mizuho Trust & Banking Co. in Tokyo, said that while smaller economies may feel pressure to weaken their currencies the same would not apply to Japan.
"Competitive currency devaluation is not likely in Japan now because the risks of sparking trade friction are too great. The Swiss can get away with this because of the relatively small size of their economy and the limited role they play in the global economy," Sato said.
Elsewhere, investors were awaiting the outcome of a meeting of Group of 20 financial leaders in England this weekend, where they will discuss how to fight the global economic crisis. [ID:nLA715782]. (Reporting by Jessica Mortimer; additional reporting by Charlotte Cooper in Tokyo, editing by Mike Peacock)