FOREX-Yen, Swiss franc rally on safety; euro hits 15-mo high

* Yen, Swiss franc big gainers on safe-haven bids

* China committed to buying Spanish debt, boosts euro

* Japan nuclear situation deteriorates (Adds quotes, updates prices, changes byline)

By Julie Haviv

NEW YORK, April 12 (Reuters) - The yen and Swiss franc gained sharply on Tuesday on risk aversion partly brought on by fears of a worsening nuclear situation in Japan, but the sentiment may prove transitory given expectations investors' appetite for higher-yielding currencies should return.

Japan's ordeal, a commodities sell off, and a lackluster start to the U.S. earnings season prompted investors to book profits on carry trades, where investments in riskier assets and higher-yielding currencies are funded by going short on the low-yielding currencies such as the yen and Swiss franc.

"The shakeout in risk positioning, after Japan upgraded its nuclear emergency level caught the market short of yen, has been quickly bought into, outlining resilient market attitudes towards risk in line with our call," said Lena Komileva, global head of G10 strategy at Brown Brothers Harriman in New York.

"Yet, the euro's rebound today has been about more than the return of Japanese demand for euros above the 120 mark."

Against the yen, the euro was down 0.8 percent at 121.24, recovering from a low of 120.16 yen hit earlier in the day.

"Growth in carry trades are owned heavily and looked overextended, especially the yen crosses. These are the ones looking shaky," said Tom Fitzpatrick, chief technical strategist at CitiFX in New York.

The initial sell-off in risk was prompted by Japan's Nuclear Safety Agency raising the severity rating of the Fukushima accident to level 7 -- the highest classification and the same as the world's worst nuclear disaster at Chernobyl in 1986. For details, see [ID:nL3E7FB2TZ]

The Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, fell about 1.9 percent on Tuesday in its sharpest one-day decline in a month as raw materials markets came under pressure from a sell-off in oil.

U.S. stock indexes. meanwhile, slid 1 percent as oil prices sank and aluminum company Alcoa's leaner-than-expected revenue started the earnings season on a disappointing note. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Commodity prices versus 2008 highs:

http://r.reuters.com/sys88r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The euro was another big mover, rising to a fresh 15-month high against the dollar above $1.45, boosted by reported buying from China and news the world's second largest economy was willing to purchase more Spanish debt.

The euro's break above $1.45 was a bullish signal, which could open a test of $1.4550 and $1.4580. Both levels are said to be lined with option barriers.

"The greenback's inability to bounce today means that a further weakness is a clear and present risk and a further decline is possible in coming days," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.

Earlier the euro surged to $1.4518, its highest since mid-January 2010, according to electronic trading platform EBS. By afternoon New York trade it had come off its peaks, trading up 0.4 percent on the day at $1.4484 .

The China news also helped drive Spanish yields. Spanish 10-year yields have fallen to 5.18 percent on Tuesday from a recent high of 5.55 percent on March 10.

For the China news, click on [ID:nB9E7EN01X].

Citi's Fitzpatrick thinks the euro could pull back a little bit from $1.45.

"We do have come a long way for a very short period of time. Maybe at this stage, we have gotten a little bit overextended and we could go back to $1.40, but probably not much lower," Fitzpatrick said.

But he added that the overall positive bias on the euro remained intact, and Citi's forecast is for the euro to rise above $1.50 and settle at around $1.4850 by year-end.

The U.S. dollar fell 1 percent to 83.76 yen , near technical support at its 200-day moving average just below 83.50.

The yen rose for a fourth straight session against the dollar, partly retracing 10 consecutive days of losses. The Swiss franc also advanced for a fourth straight day against the greenback. The dollar fell 1.1 percent against the Swiss franc to 0.89640. It earlier dropped to 0.89446, its lowest in more than three weeks. (Additional reporting by Gertrude Chavez-Dreyfuss, Editing by Chizu Nomiyama)