FOREX-Yen, dollar fall as equity mkts recover poise

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* Citi merger talk, equity rebound prompt FX turnaround

* "Risk" currencies like sterling, Aussie and NZ dlrs rise

* General economic, financial distress likely to limit move

* Dlr up at 95.20 yen <JPY=>, euro up to $1.2530 <EUR=>

By Jamie McGeever

LONDON, Nov 21 (Reuters) - The yen fell back sharply from earlier highs and the dollar weakened broadly on Friday as a rebound in global stocks from the previous day's rout curbed investors' demand for the Japanese and U.S. currencies.

Talk that beleaguered U.S. bank Citigroup (C.N) could explore a merger deal, Japanese officials warning that the recent equity market slide is destabilising and speculation China may cut interest rates helped lift risk appetite.  Continued...