(Recasts, updates prices, adds comments)
NEW YORK, Aug 31 (Reuters) - The dollar gained against the euro but fell against the yen on Friday as investors debated whether the credit crisis would drag on global growth despite initial enthusiasm for a White House plan to help U.S. homeowners cope with tough lending conditions.
President George W. Bush and Federal Reserve Chairman Ben Bernanke said in separate speeches on Friday that there would be no bailout of speculators and gave no indication an end to mortgage market turmoil is near, sparking a small safe-haven bid in the dollar.
But most gains eroded as investors came to realize that Bernanke offered little new guidance on the outcome of a Fed policy meeting in September, and Bush's plan was viewed as vague and perhaps too limited to contain market turbulence.
"People are keying in to the fact there is risk and that there is more in the pipeline," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey.
The dollar fell 0.1 percent to 115.78 yen after earlier touching session lows around 115.50 yen <JPY=>.
Against the yen, the euro was down 0.2 percent to 157.74 yen <EURJPY=>.
The euro traded around session lows against the dollar at $1.3623 <EUR=>, down 0.1 percent, largely pressured by the decline in the euro/yen and other crosses, Trevisani said.
The dollar index (.DXY: Quote, Profile, Research), a gauge of the greenback's performance against a basket of six major currencies, was flat at 80.824.
Dealers said volume thinned out as the New York session progressed as people prepared to leave early for the long holiday weekend in the United States, with markets closed on Monday for Labor Day.
CARRY TRADE SUFFERS IN AUGUST
High-yielding currencies such as the Australian dollar and the New Zealand dollar initially gained on news reports about the White House plan, which was mostly aimed at enabling troubled homeowners to renegotiate their mortgages with their lenders to avoid default.
However, by late afternoon in New York, only the Australian dollar was up, about 0.4 percent at $0.8184 <AUD=>.
Investors have been reducing their exposure to risky assets as the crisis that began in the U.S. subprime mortgage market spread to other markets. The main beneficiary has been the yen, as investors unwind carry trades, in which a low-yielding currency such as the yen is used to finance purchases of higher-yielding, riskier assets.
The New Zealand dollar was on course for the largest monthly drop against the yen since October 1998, and the Australian dollar was set for the biggest monthly loss against the yen since September 2001.
This week, financial markets have stabilized, and the yen's rapid ascent earlier in the month slowed.
The market's attention will likely focus on whether economic data from now until the next Fed policy meeting on Sept. 18 would reflect enough weakness to cause policy-makers to cut the benchmark fed funds rate. The central bank has kept its target for fed funds, the rate banks charge each other for overnight loans, steady at 5.25 percent since late June 2006.
"The Fed has not decided today whether it will cut rates in September, and the question is whether ongoing credit strains until September 18th would qualify as sustained," said Nick Bennenbroek, head of currency strategy with Wells Fargo in New York.
(Additional reporting by Steven C. Johnson)