FOREX-Dollar rises from four-month lows on renewed risk

* Dollar rebounds from 4-month low versus basket

* Yen gains as riskier assets retreat after rally

* U.S. stocks fall, keeping risk appetite subdued (Recasts, adds comments, changes byline)

By Vivianne Rodrigues

NEW YORK, May 11 (Reuters) - The U.S. dollar rose on Monday, rebounding from a four-month low as a global decline in stock prices boosted the greenback's safe-haven appeal and investors bought the currency after a sharp selloff last week.

Renewed risk aversion also boosted demand for the Japanese yen, which gained versus the euro and the dollar, as well as against higher-yielding currencies such as the Australian dollar. The U.S. and Japanese currencies are often perceived as safer assets in times of market volatility.

Earlier in the global session, hopes that the worst of the economic slump and financial crisis was over pushed the dollar to multi-month lows, but with the outlook still far from certain, investors were reluctant to sell the U.S. currency.

The dollar tumbled last week as stocks climbed, fueled in part by reports suggesting the bottoming of the economic slowdown, including a better-than-expected reading on the U.S. labor markets on Friday.

"The market was getting a little ahead of itself last week," said Vassili Serebriakov, currency strategist at Wells Fargo Bank in New York.