Yen rises as global recession worries remain

* Yen up vs dollar and euro

* Investors remain worried about global recession

* Fears for future of U.S. automakers hurt sentiment

TOKYO, Nov 19 - The yen rose against the dollar and the euro on Wednesday, rebounding further from losses due to a late rally in Wall Street shares, as investors remained worried about a deepening global recession and returned to the safety of the Japanese currency. Fears about the future of U.S. automakers also darkened investors' sentiment as top executives of General Motors, Ford and Chrysler warned Congress that their industry was teetering on the brink of disaster.

Robert Nardelli, head of Chrysler LLC, saw potential systemic risk if his company went into bankruptcy or failed, he said in testimony at a U.S. Senate Banking Committee hearing.

The hearing came as Treasury Secretary Henry Paulson reiterated his opposition to diverting $25 billion from a $700 billion financial bailout programme to rescue Detroit.

"Market players are watching how stock markets react to the development (over U.S. automakers)," said Shuichi Kanehira, a senior trader at Mizuho Corporate Bank.

"Any negative news or comment about their future will support the yen," Kanehira said.

The dollar fell 0.3 percent from late New York trade to 96.70 yen after rising above 97 yen on a late gain in U.S. share prices.

The euro slipped 0.3 percent to 122.10 yen, off earlier highs around 122.70 yen.

Aversion to risk usually benefits the yen as investors who have borrowed it at low interest rates to finance investments elsewhere in risky carry trades are forced to buy it back to cover their positions.

The single European currency edged up 0.1 percent against the dollar to $1.2632.