* Yen vs dlr hits highest since February as carry unwound
* Dollar up vs Aussie, sterling, euro
* G8 draft statement doesn't mention FX; Q2 earnings eyed (Recasts; updates prices, adds details)
NEW YORK, July 8 (Reuters) - The Japanese yen soared across the board in its biggest jump in months on Wednesday as renewed concerns about a slow global economic recovery prompted investors to rush to undo bets against the Japanese currency.
Gains in the yen multiplied after it traded through key technical levels on the dollar, traders said. Investors then reversed trades where they had borrowed in yen to buy higher-yielding currencies.
As traders sold high-yielding currencies, they bought back yen.
Risk aversion also helped bolster the dollar against other major currencies adding to the momentum from a Japanese official saying leaders of the Group of Eight major economies did not discuss the dollar's role as the key global currency at Wednesday talks on the economy.
"Risk assets are still being liquidated," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "That's hitting the yen crosses and carry trades are under significant pressure. And most of the selling so far of those yen crosses has been absorbed by dollar/yen."
News that Chinese President Hu Jintao, who was due to attend the summit in Italy, was returning home to deal with unrest in the western region of Xinjiang had already dampened speculation that any currency comment would be added.
Investors instead focused on whether Chinese economic growth will be a driver of the global economy, given its internal problems.
The euro fell to 127.05 yen, its lowest since May, according to Reuters data in New York. It last traded down 3.1 percent at 127.87 yen.
The dollar slid 2.7 percent to 92.27 yen, having hit its lowest since February, according to Reuters data in New York.
It was the biggest one-day move in the euro against the yen since November at current prices. And the biggest one-day move by the dollar against the yen since March at current prices.
The euro was down 0.5 percent against the dollar at $1.3849.
Draft statements for the G8 leaders and for leaders of emerging market economies, made no direct reference to foreign exchange, though they highlighted "significant risks" facing the world economy.
China had been one of the most vocal governments in seeking to discuss an alternative international currency to the U.S. dollar, but political turbulence in China has turned investors' attention elsewhere.
"Part of the optimism earlier about a worldwide recovery was based on the assumption that China would be this locomotive of growth and keep the rebound going," said Boris Schlossberg, director for currency research, at GFT Forex.
"As the political situation in China becomes problematic, it provides another reason for investors to sell any high-yielding currencies, benefiting the dollar and the yen," he added.
Alcoa Inc, the first Dow Jones industrials component to report quarterly earnings, is expected to post its third consecutive quarterly loss later on Wednesday.
The Australian dollar fell by 1.8 percent to $0.7750 and fell to its lowest since mid May against the yen, shrugging off data earlier on Wednesday showing a surge in Australian consumer confidence.
Sterling also hit a one-month low against the dollar, continuing to fall following weak UK industrial production data on Tuesday and on concerns that the Bank of England may expand asset purchases under its quantitative easing program.