* Yen eases after PBOC sets stronger yuan guidance rate
* But worries of further yuan weakness linger
* Rand slides in early Asia, dlr/rand up as much as 10 pct
* Japan retail trader stop-losses add to rand fall-trader (Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, Jan 11 (Reuters) - The safe haven yen eased against the dollar after China's central bank set a stronger guidance rate for the yuan on Monday, soothing fears that Beijing is trying to weaken its currency to gain a competitive export advantage.
China's yuan firmed on Monday after the central bank set the daily midpoint rate higher for a second day, after allowing it to weaken for eight consecutive sessions. now, the higher guidance rate helped calm market fears that Beijing may want to engineer a sharper devaluation, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
But concerns over China's foreign exchange policy lingered, he added.
"We don't know what will happen tomorrow. If the guidance rate is set lower tomorrow, we could see the same thing as we saw before," Okagawa said.
Risk appetite was battered globally last week, benefitting the yen, after China guided the yuan sharply lower, stoking worries about the health of the world's second-largest economy and the outlook for global growth.
The dollar held steady against the yen at 117.25 yen JPY= . Earlier on Monday. Earlier, the dollar had touched a low of 116.70 yen, its lowest level since late August.
The Australian dollar, often used as a liquid proxy for China plays, was steady at $0.6956 AUD=D4 , up from a four-month low of $0.6927 set earlier on Monday.
Against the yen, the Aussie eased 0.1 percent to 81.50 yen AUDJPY=R . It fell to 80.84 yen earlier, the Aussie's lowest level against the yen since October 2012.
The euro eased 0.1 percent to $1.0915 EUR= , but held well above Friday's low of $1.0803.
Japan's financial markets were closed for a public holiday, resulting in thinner trade than usual.
RAND HITS RECORD LOW
The yen had surged broadly in early Asia trade as the South African rand tumbled, a move that traders said was probably exacerbated by position unwinding by leveraged margin traders.
The dollar rose as much as 10.3 percent to 17.9950 rand ZAR=D3 , sending the South African currency to a fresh record low. The dollar last stood at 16.7300 rand, up 2.5 percent from late U.S. trade on Friday.
The rand had already been under pressure against the dollar after surprisingly strong U.S. jobs data on Friday prompted traders to ramp up bets that the Federal Reserve would raise interest rates again in March.
Against the yen, the rand slid to as low as 6.7147 yen ZARJPY=R , and was last down 2.6 percent from late U.S. trade on Friday at 7.0074 yen.
The rand's fall was caused by "massive liquidation" of carry trades in a thin market, and seemed to be partly a result of stop-loss selling by Japanese retail margin traders, said Jeffrey Halley, FX trader for Saxo Capital Markets in Singapore.
"Emerging markets (currencies) sold aggressively after Tokyo margin servers turned on at 7 a.m. Tokyo," he said, adding that other emerging currencies such as the Mexican peso also came under pressure.
The Mexican peso MXN=D3 weakened to a historic low of 18.01 pesos per dollar amid concerns over China's slowing economy and persistent declines in oil prices.