* Egyptian civil unrest prompts safe-haven buying
* Yen recovers after fall on demand from Japan exporters (Recasts, adds quotes, updates prices)
NEW YORK, Jan 28 (Reuters) - The dollar and Swiss franc rallied on Friday as events in Egypt prompted more investors to see the Middle East and North Africa destabilizing, increasing the demand for safer havens.
Dozens of people were wounded as police and demonstrators fought running street battles in Cairo in unprecedented protests against President Hosni Mubarak's three-decade rule. [ID:nLDE70Q2OZ]
Earlier this month, a popular revolt forced Tunisia's leader to flee the country. [ID:nLDE70Q2OZ]. Though on a much smaller scale, Saudi authorities detained dozens of demonstrators on Friday in Jidda who gathered to protest poor infrastructure after deadly floods swept through Saudi Arabia's second-biggest city. [ID:nLDE70R19L].
"There's some concern about the events in North Africa, especially in Egypt now," said Samarjit Shankar, managing director of global foreign exchange strategy at BNY Mellon in Boston. "I believe that's the primary catalyst here."
The dollar also got a boost from a report on U.S. gross domestic product [ID:nN27219246] [ID:nCLASCE79L], while the yen recovered from Thursday's sell-off, though investors were still cautious on what a downgrade of Japanese long-term debt may mean for other large developed-economy debtors.
The euro
The dollar lost 0.3 percent against the Swiss franc
"If the Mubarak government falls, the next few days could see some heavy U.S. dollar and Swiss Franc safe-haven buying," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey.
The Israeli shekel
The cost of insuring Middle East and North African debt against default rose sharply on Friday as investors worried about political stability in the region. [ID:nLDE70R0OH].
Fitch Ratings revised the rating outlook on the Arab Republic of Egypt to negative from stable. [ID:nWLA4008]
YEN GAINS
The yen gained as demand from Japanese exporters and speculators helped the currency to recoup some losses from a broad sell-off triggered the previous day by a cut to the country's credit rating.
The dollar
But analysts said the Standard and Poor's downgrade to AA- highlighted Japan's fiscal problems and could still hurt the yen.
In the 10 minutes between 7:50-8:00 GMT on Thursday, dollar/yen trading activity on the EBS trading platform was 5 times more active than the average one-hour period for the first three weeks of the year, EBS said.
"When we have significant news like Japan yesterday and a sell-off, we tend to see some recovery," said Kathy Lien, director of research at GFT Forex in New York. "The strength of the recovery is what is surprising. The theme today is risk aversion, and markets are nervous." (Additional reporting by Wanfeng Zhou in New York and Naomi Tajitsu in London) (Reporting by Nick Olivari; Editing by Dan Grebler)