By Jeremy Gaunt LONDON (Reuters) - Fears that the credit crisis is back rattled financial markets on Tuesday as a newspaper report added to previous woes by suggesting that U.S. giant Lehman Brothers may need to raise nore capital. Equities were lower, bonds got a boost from investors seeking safety and the Japanese yen strengthened in a display of investor risk aversion. The Wall Street Journal reported that Lehman Brothers may raise $3-$4 billion in fresh capital and suggested the bank could post its first quarterly loss since going public. The report followed Monday's Standard & Poor's debt rating downgrade of three big securities companies and the ouster of number four U.S. bank Wachovia's chief executive. Monday also saw UK mortgage lender Bradford & Bingley slash its emergency fundraising price to get a private equity lifeline. "We don't seem to have left all the problems with the banking system, as looked likely a few weeks ago," said Edward Menashy, economist at brokerage Charles Stanley. Investors had been looking past the credit crisis that hit last year when U.S. subprime mortgages began to unravel, focusing instead on slowing economies and inflation fears. MSCI's main world stock index was down around 0.1 percent and the emerging markets equivalent shed nearly 1 percent. European stocks were slightly lower. Japan's benchmark Nikkei average had earlier closed down 1.6 percent. "What we're seeing is a tug-of-war between concerns about inflation and worries about the credit crunch," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. The Nikkei shed 230.97 points to finish at 14,209.17. The broader Topix was down 1.2 percent at 1,407.44. RISK AVERSION On foreign exchange markets, the dollar fell broadly while the low-yielding yen rose after the Lehman report. The dollar fell as much as around 0.4 percent to 103.98 yen, with the Japanese currency adding to sharp gains the previous day. The euro rose 0.3 percent to $1.5585 and the dollar index was down more than 0.2 percent at 72.767. Attention was also on a speech by U.S. Federal Reserve Chairman Ben Bernanke later on Tuesday (1300 GMT), with investors looking for clues on the policy outlook while eyeing a potential interest rate hike later in the year. Euro zone government bonds benefited from a move to safety. June Bund futures were trading at 112.46, up 13 ticks from Monday's settlement close, while the 10-year bund yield was steady to higher at 4.365 percent. The two-year Schatz yield was down 4.7 basis points at 4.248 percent. | 
