Stg rallies broadly; extreme risk aversion eases

* Sterling bounces from 13-year low vs yen <GBPJPY=R>

* Pound grabs respite as risk aversion eases

* UK outlook remains grim despite resilient retail sales

LONDON, Nov 21 (Reuters) - Sterling bounced from a 13-year low against the yen on Friday, as the low-yielding unit's rally on global recession worries stalled after Japan's finance minister warned about extreme market moves.

Japanese Finance Minister Shoichi Nakagawa said on Friday the authorities must be ready to deal with big swings in markets. [ID:nTKG003105]

Sterling's drive higher against the yen also allowed the pound to gain against the dollar and euro as rallying stock markets reflected an easing in extreme risk aversion.

European stock markets rose 1.2 percent in early trade .FTEU3, while U.S. stock futures pointed to a stronger Wall Street open.

But analysts warned that any sterling rally would prove relatively short-lived as the sharply slowing economy retains massive exposure to the flailing global financial sector.  Continued...