* Yen down across the board on economic concerns
* Dollar slips vs some major currencies after Monday's gain
* Sterling recovers from 6-week low vs dollar
By Kaori Kaneko
TOKYO, March 10 (Reuters) - The yen fell across the board on Tuesday as doubts about its status as a safe port in the global economic gloom eroded its standing with overseas investors, who are concerned about Japan's own weak economic outlook.
The dollar also lost ground, retracing some of Monday's sharp gains against the pound and Australian and New Zealand dollars and slipping against the euro.
The yen has fallen in the past month as Japan's economy grapples with diving exports and the worst recession of the post-war era. The current account balance swung to its largest deficit on record in January, adding to the selling pressure.
Market participants say foreign investors have been reducing long positions in the yen, with expectations withering that it can surpass a 13-year peak of 87.10 per dollar hit in January.
"Expectations that Japan will see more months of trade deficits and data showing Japanese investors have been net buyers of foreign assets are adding to views among overseas investors that the yen may not gain much," said Koji Fukaya, senior currency strategist for Deutsche Securities in Tokyo.
"But their actions remain within a reduction of prior positions and have not come so far to create yen-shorts yet."
Recession in many of Japan's export markets has dried up overseas demand for its goods, meaning exporters also have fewer dollars to sell in exchange for yen, traders say.
The euro advanced 0.6 percent to 125.35 yen, the Australian dollar jumped more than 1 percent to 63.06 yen, as did the New Zealand dollar, and sterling rose 0.6 percent to 136.90 yen.
The dollar held steady at 98.98 yen, below a recent four-month peak at 99.69. Its rapid rise from the January low has lost steam this week and it was also down more than 0.5 percent against a basket of six currencies, at 88.782.
Fukaya said however its range had shifted to 95-100 yen and a jump above 100 yen could come as soon as this month.
STERLING UP BUT OUTLOOK GLOOMY
The Australian dollar also climbed against the U.S. currency, gaining almost 1 percent and retracing nearly all its losses from Monday when global recession and banking sector worries sent investors into the more liquid U.S. dollar.
Investors were pausing on Tuesday to assess the risk outlook, as Asian share markets showed a mixed picture and S&P futures indicated a positive start on Wall Street later.
"It is hard to think that stocks will turn to an upward trend given the credit situation. The dollar is likely to retain its safe-haven status," said Kazuyuki Kato, treasury department manager at Mizuho Trust and Banking Co.
"But since gains in the dollar have progressed to a considerable degree, the currency will face its peak at some level," he said.
The euro was a beneficiary of the dollar's retreat, advancing 0.4 percent to $1.2672. It touched a three-month low of $1.2457 last week.
The pound recovered from a six-week low to rise 0.4 percent on the day to $1.3842. The rebound forced those who had expected it to dip further to buy it back, fuelling the gain.
Sterling shed 2 percent on Monday as bank sector worries intensified after Lloyds Banking Group said the UK government was taking a stake of up to 77 percent.
Some traders said, however, they expected the pound to remain under pressure because of worries about the UK banking sector. (Additional reporting by Satomi Noguchi, Charlotte Cooper; Editing by Chris Gallagher)