FOREX-Yen, US dollar up as earnings concern slows risk taking

* Euro falls roughly 1.0 pct vs dollar, yen

* Market watching stocks, U.S. earnings for direction

* SNB to stick "decidedly" to preventing franc rise - Roth

* ECB starts covered bond purchases slowly

(Recasts, adds comment, updates prices, adds detail, changes byline, changes dateline, previous LONDON)

By Nick Olivari

NEW YORK, July 10 (Reuters) - The dollar and yen rose against other major currencies on Friday on investor caution as the U.S. corporate earnings season began and share prices fell.

The yen hit a five-month high against the U.S. dollar this week and surged to two-month highs against the euro and Australian dollar as investors unwound bets in riskier assets that they made using the low-yielding Japanese currency.

It lost some those gains on Thursday but then held its ground as the other currencies lost momentum and S&P stock futures signaled a weak start to Wall Street later. A profit warning from Chevron added to the specter of a weaker-than-expected second half economic recovery.

"Currency markets move into Friday's North American session with the dollar regaining losses from yesterday move, seemingly unaffected by any comments coming out of the G-8," said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto in a note to clients.

"Support is instead coming in from softer equities and some worries over the potential for near term economic recovery, both of which have helped the dollar index push back towards its opening level for this week," Tihanyi said.

The yen gained in particular this week as the U.S. dollar's reserve currency status came under scrutiny at the G8 meeting in Italy, although reaction was muted to calls from China for a review of the reserve currency system at a meeting of world leaders on Thursday.

In early New York trade, the euro was 0.8 percent lower at $1.3909 . The common currency was down 1.5 percent against the yen at 128.36 yen.

The U.S. dollar index, which tracks performance against a basket of six major currencies, was up 0.6 percent at 80.382 <.DXY>. The dollar was down 0.7 percent at 92.27 yen .

A report on U.S. international trade also helped boost the dollar Friday. The U.S. trade gap narrowed unexpectedly to $26 billion in May to the lowest reading since November 1999 as exports rose despite weak global demand and imports shrank, government data on Friday showed.

SWISS FRANC EYED

The European Central Bank and euro zone national central banks bought 23 million euros' worth of covered bonds under the 60 billion euro programme launched this week, the ECB said on Friday. The program is aimed at boosting lending to stimulate the ailing economy.

The Swiss franc fell after Swiss central bank chief Jean-Pierre Roth said in an interview published on Friday the Swiss National Bank was sticking "decidedly" to its policy to prevent an appreciation of the Swiss franc.

The dollar gained 0.9 percent on the day to 1.0880 Swiss francs while the euro rose 0.1 percent to 1.5136 francs.

Sterling fell 1.0 percent on the day to $1.6181 , relinquishing gains made on Thursday in part after the Bank of England surprised markets by not using the remaining 25 billion pounds available under the current asset-buying program. The central bank has said it will review the program in August when it releases new quarterly forecasts. (Additional reporting by Naomi Tajitsu in London) (Reporting by Nick Olivari)