* Investors close shorts in dollar and yen before year-end
* Shares soft after Wall St down, risk appetite capped
* But early selling of risk-currencies abates
* New Zealand dollar off 2-week low, Aussie off lows
By Satomi Noguchi
TOKYO, Nov 20 (Reuters) - The dollar and yen on Friday kept their broad gains made the previous day but investor selling of higher-yielding currencies slowed as profit-booking on their rallies of the past few months eased up.
The Australian dollar edged back from early losses and the New Zealand dollar climbed off a two-week low as activity in Asian trading time slowed.
But both currencies, which have been popular trades against the low-yielding dollar and yen this year, were still about 1.5 percent down on the week after plunging the previous day when investors cut long positions ahead of a three-day weekend in Japan and next week's U.S. Thanksgiving holiday.
"It's a smaller version of what we saw yesterday. The risk currencies are still generally on the weak side but there's been very little activity in the markets," said Andrew Robinson, FX market strategist at Saxo Bank in Singapore.
"There are still some buyers on dips on the risk currencies but not to the extent there were two or three weeks ago."
The dollar index was unchanged on the day at 75.246, well above a 15-month low of 74.679 touched on Monday.
The euro slipped 0.1 percent to $1.4915, still with talk of double-no-touch options at $1.48-1.51 expiring later on Friday.
Traders said euro buying ahead of this was putting a bit of a floor under euro/yen but it could fall after the option expiry and take dollar/yen with it. The euro was down 0.3 percent at 132.31 yen after dipping close to its 200-day moving average at 132.13.
The Australian dollar, which dropped as much as 1.6 percent the previous day to a two-week low of $0.9132, was holding at $0.9198, little changed from late U.S. business but well off a 15-month high of $0.9407 struck on Monday.
It got some help from a Japanese asset manager who bought Aussie dollars against the yen but was still down about 0.2 percent on the day at 81.69 yen.
The New Zealand dollar extended Thursday's fall of more than 2 percent and hit a two-week low of $0.7256 before recovering above $0.7300 to stand unchanged on the day.
A weak day on stock markets also cooled investor enthusiasm. Asian shares fell, with Tokyo's Nikkei share average ending down 0.5 percent, after a fall in U.S. stocks on another batch of data pointing to the fragility of the recovery.
Traders said the bout of dollar buying this week was partly seasonal as it could be seeing demand from overseas corporates ahead of the year-end in addition to investors closing their dollar shorts.
"Hedge funds are cashing out their positions to prepare for year-end redemption requests from their clients. And that move is encouraging others to take profits as well," said the head of a trading desk at a big Japanese bank.
But against the yen, the dollar faced some pressure with traders reporting that short-term speculators were testing its downside. It slipped 0.3 percent to 88.74 yen, within reach of a six-week low of 88.63 yen hit on trading platform EBS the previous day.
The Bank of Japan kept interest rates on hold, as widely expected, and upgraded its assessment on the economy despite government grumbling that its forecast of a moderate economic recovery is too rosy.
Market reaction was largely subdued as the BOJ maintained its commitment to keep monetary conditions very easy in a statement, reassuring markets and the government that it was not seeking an exit from ultra-low rates any time soon. (Additional reporting by Charlotte Cooper; Editing by Edwina Gibbs)