* European shares open 0.2 pct lower ahead of data
* Euro firms dips, ECB caution provides support
* Dollar falls vs yen after sharp and rapid rise
By Marc Jones
LONDON, Jan 8 (Reuters) - European shares and the euro dipped on Tuesday after an unexpected slump in German exports set a negative tone ahead of other data that will fill out the picture of the region's economic health.
Euro zone sentiment, employment and retail sales are due at 1000 GMT and economists have forecast a slight improvement.
"The latest German trade report was disappointing, reporting a much steeper-than-expected 3.4 percent month on month decline in exports in November, following a 0.3 percent rise previously," said Daiwa economist Emily Nicol, adding it pointed to a sharp German contraction at the end of 2012.
European shares opened down 0.2 percent as London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX started the day 0.1 to 0.3 percent lower.
In the currency market, the euro was 0.1 percent lower against the dollar but remained firmly above $1.31 with economists seeing little chance that the ECB will signal a further cut to its already record low interest rate on Thursday.
The dollar paused from a sharp rally against the yen which has seen it rise more than 10 percent against the Japanese currency in less than two months.
German government bond prices also edged higher as investors dipped a toe back into the market for low-yielding but secure assets as a steep selloff last week made valuations more attractive.
The German bund future was up 10 ticks at 143.16 by 0810 GMT, climbing for a second day after a small rise on Monday and moving in line with U.S. Treasuries. The rebound follows a three point sell off last week when an easing of U.S. fiscal concerns saw investors pile into riskier assets.
Later in the day eyes will focus on Spain when it details how much money it needs to raise this year. The country is at the frontline of the euro zone debt crisis and is expected by many to turn to official lenders for a bailout in 2013.