* Yen stays near 5-month high vs dollar, 2-mth peak vs euro

* Caution towards forex intervention grows

By Rika Otsuka

TOKYO, July 9 (Reuters) - The yen steadied on Thursday, close to a five-month high against the dollar and a two-month peak versus the euro hit the previous day when mounting doubts about the health of the global economy spurred risk aversion.

The dollar and the euro both fell more than 2 percent against the yen on Wednesday, posting their sharpest one-day drops since March.

In recent weeks, optimism about the global economy's recovery prospects has started to wane, prompting investors to trim riskier assets such as stocks while seeking the safety of government debt.

Dealers said the dollar's fall had been exacerbated by automatic sell orders triggered around 94.00 yen. As the dollar fell below that level, liquidity dried up, steepening the plunge.

"The dollar remains vulnerable as U.S. Treasury yields slid yesterday, narrowing the dollar's yield advantage over the yen," said Minoru Shioiri, senior manager of forex trading at Mitsubishi UFJ Securities.

"But the greenback is unlikely to plunge against the yen during Tokyo trade as those who needed to cut long dollar positions have already dumped enough dollars."