* Copper, gold rise but are headed for weekly declines * U.S. economic data point to growth in world's largest economy * Europe's debt worries remain a concern By Jane Lee KUALA LUMPUR, Dec 16 (Reuters) - Copper, gold and grains rebounded on Friday, reducing declines for the week, as signs of economic growth in the United States bolstered optimism that demand will be supported by the largest economy, even as Europe's crisis hurts emerging economies. Commodities are poised for weekly losses, with copper headed for a loss of 6 percent and spot gold set for a loss of 7 percent, as each marks its biggest weekly fall since late September, while Brent crude was on course for a loss of 4 percent. Prices took a battering earlier in the week over investors' disappointment at European leaders' lack of concrete action to resolve a two-year-old debt crisis. "Europe remains a major concern while growth in other parts of the world, such as China, is also slowing," said Ang Kok Heng, who helps manage about $400 million as chief investment officer at Phillip Capital Management Sdn in Kuala Lumpur. "The U.S.'s commodity consumption is steady but it's growth in China's consumption that's driving demand and determining prices." The euro zone's financial troubles have spread beyond the region, as confidence ebbed. JAPAN BUSINESS SENTIMENT WORSENS Japan's business sentiment index worsened in the three months to December, the central bank's tankan survey showed, as a stubbornly strong yen, Europe's debt crisis and slowing global growth clouded the country's recovery prospects. On Thursday, a preliminary purchasing managers' survey showed China's factory output shrank again in December after new orders fell. The contraction highlighted concern that manufacturers are struggling with waning global demand and tight domestic credit conditions in China, the world's biggest consumer of copper. Three-month copper on the London Metal Exchange climbed 2 percent to $7,357 a tonne, after reaching a session high of $7,359.75, heading for its biggest weekly loss since the end of September and the first annual decline in three years. Spot gold jumped 1.6 percent to $1,595.30 an ounce, off a 2-1/2-month low of $1,560.36 in the previous session. Bullion has fallen a second week. U.S. gold rose 1.2 percent to $1,596.40. Demand for gold as a safe-haven investment has also waned as tighter credit reduced the amount investors could borrow to bet on commodities, equities or other assets. Credit Agricole said on Thursday it would stop trading commodities and reduce its financing of the market, a sign that the volatility in commodities trading has led to losses or become less profitable than past years. The formerly farm-focused bank that had boosted its energy trading in recent years warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. OIL, GRAINS The euro clung to modest gains against the dollar in Asia on Friday, having ended three straight sessions of losses. Declines in the U.S. dollar make commodities denominated in the greenback cheaper for buyers paying in other currencies. Brent crude futures rose above $104 a barrel on Friday on worries about supply disruption after the U.S. Congress approved a bill imposing sanctions on Iran's central bank, limiting buyers' ability to pay for oil from the Islamic Republic. Chicago soybeans rose around half a percent, gaining for a second straight day, on concerns over dry weather in South America, while corn and wheat also edged up after two sessions of losses. Chicago Board of Trade January soybeans rose 0.5 percent to $11.17 a bushel by 0355 GMT. March wheat added 0.1 percent to $5.80 a bushel and March corn gained 0.1 percent to $5.79-3/4 a bushel. "The U.S. buys 10 units of commodities and it hardly changes but China's the one buying seven units and growing its demand very quickly," said Phillip Capital's Ang. (Reporting by Jane Lee;Editing by Clarence Fernandez)

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