* Sterling plummets through key support to fresh 31-year low

* Traders cite "hard" Brexit worries but see no clear trigger

* Stocks edge lower ahead of U.S. nonfarm payrolls data

* Disorderly reaction to U.S. rate hike may lead to outflows - IMF

* Treasury yields consolidate after recent rise

By Saikat Chatterjee

HONG KONG, Oct 7 (Reuters) - Sterling recouped some losses after plunging to a three-decade low in Asian trade on Friday amid growing fears of a "hard" exit by Britain from the European Union, while Asian stocks fell as investors took profits from a recent rally.

European markets were expected to open slightly higher with tiny gains forecast for Britain's FTSE, Germany's DAX and France's CAC.

The pound nosedived 9 percent at one point to $1.1491 after crashing through key support levels, triggering a wave of selling. An early trade even lower than that was later cancelled.

But it quickly bounced and it was around 1.2455 by early afternoon, still down about 1.3 percent from late U.S. levels and leaving traders scratching their heads in the absence of any major news overnight.

"This was even a bigger move than what we saw after the Brexit vote. There were almost no offers, no bids when this happened," said a trader at a European bank in Tokyo.

The pound has come under renewed pressure as fears grow that Britain's divorce from the EU will be messier and costlier for the economy than expected. UK Prime Minister Theresa May on Sunday set a March deadline for the formal departure process from the EU to begin.

"The whole thing's been on a precipice since Sunday, since Theresa May (pointed to) March Brexit negotiations, but the selling has been very substantial so you can only think its been part of that general punishment of the pound for Brexit," said Sean Callow, senior currency strategist at Westpac in Sydney.

"I think we've underestimated how many people had money positions for a very wishy-washy Brexit or even none. May's comments have really just started the cleanout and we just haven't seen any sign of bouncing."

While sterling's move broadly coincided with some news reports that Britain's separation from the eurozone may be a tough process, some traders blamed it on a possible a "fat finger" error triggering automatic stop-loss orders.

"A few stops got triggered in early trading and once cable broke 1.20, option barriers sent it lower," said Gerrard Katz, head of Asian FX sales and trading at Scotiabank said. "The broader market impact has been limited and cable should consolidate between the 1.20 and 1.25 levels."