* Yen, Swiss franc gain sharply as carry trade unwinds
* Japan, U.S. equities slide buoy safe-haven bids (Recasts; updates prices)
By Julie Haviv
NEW YORK, April 12 (Reuters) - The yen and Swiss franc gained roughly 1 percent against the dollar on Tuesday amid heightened risk aversion due to Japan's nuclear crisis and a slide in U.S. stocks.
The move into safe havens forced many to unwind carry trades, strengthening the yen and also bolstering the Swiss franc.
Investors had been borrowing heavily in low-yielding currencies such as the yen and using the funds to invest in higher returning markets like the Australian dollar, a trend that some said had become overstretched.
"The shakeout in risk positioning, after Japan upgraded its nuclear emergency level, caught the market short of yen," said Lena Komileva, global head of G10 strategy at Brown Brothers Harriman in New York.
Against the yen, the euro was down 0.9 percent at 121.10, recovering from a low of 120.16 yen touched earlier in the day.
The U.S. dollar fell 1.1 percent to 83.64 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 0.89650. It earlier dropped to 0.89446, its lowest in more than three weeks.
Tom Fitzpatrick, chief technical strategist at CitiFX in New York, said carry trades looked "overextended," especially the yen crosses.
"These are the ones looking shaky," he said about yen-funded carry trades.
The session's initial sell-off in risk was prompted by Japan's Nuclear Safety Agency raising the severity rating of the Fukushima accident to level seven -- the highest classification on the scale and the same as the world's worst nuclear disaster at Chernobyl in 1986.
On Wall Street, meanwhile, U.S. stock indexes slid about 1 percent as oil prices sank and blue-chip aluminum maker Alcoa's leaner-than-expected revenue started the earnings season on a disappointing note.
The euro was another big mover on Tuesday, rising above $1.45 to a 15-month high against the dollar, boosted by reports of buying from China and news the world's second largest economy was willing to purchase more Spanish government debt.
The dollar has tended to benefit from risk aversion, but the growing perception that the U.S. Federal Reserve will lag other global central banks in raising interest rates weighed on the greenback.
"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 late afternoon New York trade it had come off its peaks, trading up 0.3 percent on the day at $1.4476.