* Investor jitters over N.Korea related tensions ease for now
* Dollar up from Tuesday's 4-1/2 month low vs yen
* Euro down from 2-1/2 year peak vs dollar
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
LONDON, Aug 30 (Reuters) - The euro slipped back below $1.20 on Wednesday, as investors worried that a rally that has seen the single currency gain almost 14 percent since the start of the year might be running out of steam.
The dollar was broadly higher, recovering from a four-month low against the yen, as investors worries over North Koreas latest missile test eased, boosting appetite for riskier assets.
The Japanese yen and Swiss franc traditionally sought at times of political or financial uncertainty had both surged on Tuesday, with the franc hitting its strongest against the dollar in two years.
North Koreas launch of a ballistic missile over Japans northern island of Hokkaido had been the primary cause for a risk-off mood across markets on Tuesday, triggering a drop in U.S. bond yields and dragging down the dollar index which measures the greenback against a basket of six currencies to a 2-1/2-year low.
The euro had benefited from the dollars weakness, hitting a 2-1/2-year high of $1.2070 on Tuesday, having already been boosted late last week by European Central Bank chief Mario Draghis failure to mention the euros strength at a policy meeting in Jackson Hole, Wyoming.
But investors still reckon that Draghi is concerned by the euros strength. The single currency was more than a cent below Tuesdays high, at $1.19.
"The market is concerned about (Draghi) feeling more and more uneasy with the current euro levels. The fear about Draghi's possible future comments on the euro is what made the move above $1.20 unsustainable," said Commerzbank currency strategist Ulrich Leuchtmann, in Frankfurt.
The dollar index was up 0.3 percent by 1035 GMT on Wednesday. Against the yen it traded up 0.1 percent at 109.85 yen, having hit a low of 108.265 yen the previous day.
Some investors said risk appetite had been helped by the response to the North Korean missile test from the U.S. administration. President Donald Trump made a statement saying that the world had received the country's message "loud and clear" and that all options were on the table.
"Instead of the President responding to the escalation via Twitter, as has happened on many recent occasions, the White House issued an official statement to condemn the action," said IronFX analyst Charalambos Pissouros.
Investors are also gauging the potential economic fallout of Tropical Storm Harvey, which brought catastrophic flooding to Texas this week and shut down nearly a fifth of the U.Ss crude oil refining capacity.
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