* Yen erases earlier losses vs other majors
* Investors cut yen shorts ahead of Shanghai stock market
* U.S. recovery doubts linger, curbing gains in high yielders
By Satomi Noguchi
TOKYO, Aug 19 (Reuters) - The yen held firm near recent highs against other major currencies on Wednesday, erasing earlier losses as investors stayed cautious about more falls in Chinese shares and hesitated to return to risky investments.
In early Asian trade the yen fell broadly after robust U.S. corporate results gave support to Wall Street and helped boost growth-linked currencies such as the Australian dollar.
But investors cut those yen short positions ahead of the opening of the Shanghai share market, said to be the main driver of current moves in the absence of major economic data.
The Shanghai stock index moved in and out of positive territory on Wednesday after rising the day before, recouping some of its recent steep losses.
Analysts also say worries remain that stock market valuations are stretched and running ahead of economic fundamentals.
In particular, they worry about the resilience of the U.S. recovery and what will happen when stimulus effects wear off.
"The market is very conscious about movements in Chinese stock markets to see if there is any sign that the Chinese economy could be facing a change for the worse," said Takahide Nagasaki, chief FX strategist for Daiwa Securities SMBC.
The dollar was nearly flat from late U.S. trade on Tuesday at 94.65 yen, retreating from an earlier high near 95.00 yen.
The euro edged down to 133.80 yen after falling from an earlier high of 134.50 yen towards a near one-month low of 132.51 struck earlier this week on trading platform EBS.
Against the dollar, the euro was flat at $1.4145, off an earlier high of $1.4173 but remaining supported by Tuesday's better-than-expected German ZEW data..
High-yielding currencies such as the Australian and New Zealand dollars traded firmly at $0.8277 and $0.6748, respectively, up about 0.1 percent for both currencies.
The Aussie had hit an 11-month high on Friday while the kiwi reached a 2009 peak, before both retreated in the face of a sell-off in risky assets that has gathered pace since late last week.
"We are basically seeing some consolidation after the sharp moves on Friday and Monday," said Katie Dean, a senior market economist at ANZ.
"We will see more volatility and choppy trades given that not much is happening in terms of events. So any correction to stock markets could be a key driver for currencies."
The U.S. market gained 1 percent on Tuesday helped by better-than-expected results from Home Depot Inc and Target Corp.
U.S. stock markets have risen more than 40 percent since their March low. Meanwhile the Shanghai composite index is more than 50 percent higher than at the start of the year, though it has shed more than 15 percent in the past two weeks.
U.S. data on Tuesday showed starts for new U.S. single-family homes rose for a fifth straight month in July.
Still, a 13.3 percent drop in new multiparty home projects pushed overall housing starts down 1 percent last month.
Meanwhile, sterling fell 0.2 percent to $1.6525, erasing some of its sharp gains made the previous day after unexpectedly high core British inflation. (Additional reporting by Anirban Nag in Sydney; Editing by Michael Watson)