* Dollar, yen give up earlier gains and dip
* Traders not motivated to trade actively with NY mkt closed
* Sterling hits 4-mth high vs euro
* Yen little moved by Japan's political scandal
By Satomi Noguchi
TOKYO, Jan 18 (Reuters) - The dollar and yen dipped in
subdued Asian trade on Monday, giving up earlier gains as
investors hesitated to trade actively with the New York market
closed for a holiday.
The dollar and yen had risen earlier in the session as
currencies leveraged to global growth, such as the Australian
dollar, were hit by profit-taking after quarterly results from
JPMorgan Chase & Co <JPM.N> sent equity markets lower.
[]
Sterling hit a four-month high versus the euro as speculators
chased it higher after talk of possible sterling buying linked to
weekend news that French utility GDF Suez <GSZ.PA> is eyeing a
tie-up with Britain's International Power <IPR.L>.[]
The euro remained under pressure, hurt by concerns about
fiscal problems buffeting Greece, which has seen its budget
deficit balloon and its credit ratings cut. [].
"Given New York market closed for the day and many important
events ahead this week including a development over Japan
Airlines <9205.T>, people are not motivated to move actively
today," said a senior trader for a Japanese securities firm.
The euro <EUR=> stood at $1.4380 <EUR=>, nearly flat on the
day after sliding 0.2 percent earlier.
The dollar index, a gauge for the greenback's performance
against six other major currencies, slipped 0.2 percent to 77.178
<.DXY>.
The euro fell as low as 88.03 pence, its lowest since
mid-September, before trading at 88.30 pence <EURGBP=D3>, down
0.2 percent on the day with some traders saying a rise in UK
house prices added to strength in sterling. []
Against the yen, the euro made up earlier losses and stood at
130.88 yen <EURJPY=R>, up 0.2 percent on the day.
The dollar rose 0.2 percent to 90.94 yen <JPY=> as other yen
crosses recovered from earlier losses. Sterling climbed 0.4
percent against the Japanese currency, as Japanese margin traders
covered short-sterling positions, a trader for a Japanese trust
bank said.
The Aussie <AUD=D4> was up 0.1 percent to $0.9234 <AUD=D4>,
after having fallen as low as $0.9174 earlier.
U.S. financial markets are closed on Monday for the Martin
Luther King day holiday.
Investors will closely watch U.S. earnings this week, with
financial services heavyweights Bank of America <BAC.N> and
Morgan Stanley <MS.N> expected to report on Wednesday, and
results from Goldman Sachs <GS.N> due on Thursday.[]
"I don't think the U.S. banking sector has completely
recovered from the global financial crisis yet and it is too
early to become optimistic," said Jun Kato, senior chief analyst
at Shinkin Central Bank Research Institute.
"If those earnings results drag down stocks, investors are
expected to pick up the dollar and yen," he said.
Traders say a series of Chinese data this week,
including fourth-quarter gross domestic product, retail
sales and industrial production for December will also be
important for determining the direction of growth-linked
currencies.
JAPAN POLITICAL WOES
The yen showed little reaction to a funding scandal linked to
the No.2 executive in Japan's ruling party, but market players
are keen to see if it hampers government policy. []
Investors were also watching the fate of Japan Airlines
<9205.T> which will likely file for bankruptcy on Tuesday as part
of a state-led restructuring.[]
Market participants have speculated the company may have to
liquidate some of its dollar-buying derivative contracts or
repatriate overseas assets after a potential bankruptcy filing,
which could be positive for the yen.
However, the market has not seen such flows so far, analysts
and traders said.
Japan's Nikkei share average <> fell 1.2 percent, coming
off a 15-month high closing high last week. []
(Additional reporting by Kaori Kaneko; Editing by David Dolan)
