* Dollar, yen keep gains, euro on the defensive
* Aussie subdued as investors trim long positions
* Yen little moved by Japan's political scandal
By Kaori Kaneko
TOKYO, Jan 18 (Reuters) - The U.S. dollar and the yen were firm on Monday while currencies leveraged to global growth like the Australian dollar ran into a bout of profit-taking after an impressive run up since the start of the new year.
Yen crosses were trading lower as investors stayed away from riskier assets following falls in equity markets after JPMorgan Chase & Co reported deep loan losses.
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..
"The risk reward (for the euro) is skewed towards further negativity on the news front as Greece struggles to convince the markets of its three-year plan to reduce the fiscal deficit and maintain a steady hand going forward," Westpac said in a note.
"The market is ultra sensitive to towards any related news or information."
The euro edged 0.2 percent lower to $1.4351, having shed nearly 0.9 percent on Friday. Support for the single currency is seen at around $1.4285, its 200-day moving average. Against the yen, the euro was down 0.3 percent at 130.28 yen, having declined over 1 percent on Friday.
The U.S. dollar was little changed at 90.77 yen, with resistance seen around the 91.35 yen level, while support is expected around 90.60 yen. Still, falling U.S. yields are likely to see the yen gain some ground against the greenback.
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 the financial sector in focus, traders said.
Bank of America, Morgan Stanley should report on Wednesday and Goldman Sachs is expected on Thursday. Tech companies such as IBM and Google Inc are also expected this week.
"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.
The yen gained broadly late last week as investors cut back on riskier trades and higher-yielding currencies like the Australian dollar.
The Aussie was down at $0.9188 from $0.9223 late in New York on Friday.
Last year, the Aussie was one of the best performing currencies, jumping nearly 30 percent as investors piled on expectations of higher local rates and a rebound in commodities given prospects of better global growth. In 2010, it has extended those gains, having gained nearly 3 percent.
Data from the Commodity Futures Trading Commission showed investors added to their net long positions in the Australian and Canadian dollars.
In contrast, speculators turned against the U.S. dollar in the week to Jan 12, with the value of the dollar's net short position at around $2.7 billion, compared to a net long of $4.25 billion in the previous week. This was the first net short position on the dollar since Dec.15.
Traders say a raft of Chinese data this week, ranging from fourth-quarter gross domestic product, retail sales and industrial production for December could give direction to 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 making.
"If the political turmoil deepens and has an impact on the parliamentary debate about the budget, this could discourage foreign investors," said Kato of Shinkin Central Bank Research Institute.
"In that case, foreign investors who have bought Japanese stocks recently could adjust those positions," he said.
Traders say falls in Japan's share market would likely drag yen crosses lower, pushing the dollar lower against the yen as well.
Japan's Nikkei share average fell 1.8 percent, coming off a 15-month high closing high last week. (Additional reporting by Anirban Nag in Sydney)