* Yen retains most gains as investors shun risks
* Japan exporters expected to sell USD, euro before March-end
* Sterling under pressure on dismal UK fundamentals
By Rika Otsuka
TOKYO, Feb 26 (Reuters) - The yen held on to broad gains on Friday, as doubts about the pace of a global economic recovery and persistent worries about sovereign debt problems in Greece kept investors away from riskier currencies.
Traders said investors, including hedge and macro funds, were piling into the low-yielding yen, cutting positions in the pound and the euro as a recent bout of risk aversion gathered steam and stop-losses were triggered.
The yen is likely to extend its rally in near term as Japanese exporters are expected to sell foreign currencies to repatriate their overseas profits before Japan's financial year ends on March 31.
"In addition to risk aversion moves triggered by concerns about Greece's debt problem, repatriation from Japanese firms is definitely behind the yen's strength," said a senior trader at a European bank.
"It's quite understandable that anyone who needs to sell foreign currencies that they are holding would try to do so before the yen rises further, especially ahead of a big event like next week's U.S. jobs."
The euro rose 0.5 percent from late U.S. trade to 121.40 yen, off a one-year trough of 119.66 yen hit on trading platform EBS on Thursday.
But traders said the gains in the euro were largely due to short-covering ahead of the weekend.
Technical charts show the European single currency is still on a downward trend, with no strong support until 112.08 yen, a January 2009 low and its lowest since early 2002, traders said.
Sterling was little changed from late U.S. trade at $1.5261, having tumbled to a 9-month low on Thursday, hurt by dismal fundamentals in the UK..
Against the yen, sterling inched up 0.3 percent to 136.41 yen, having hit a 11-month trough hit just below 135 yen the previous day.
The dollar was up 0.4 percent at 89.37 yen, with near term support seen around 88.55 yen, its 2010 low hit earlier this month. The dollar slid over 1 percent on Thursday, falling as far as 88.80 yen on EBS, a three-week trough.
The dollar index was down at 80.64, with near-term support at around 80.08, this week's low. Investors' focus now turns to U.S. economic reports on fourth-quarter gross domestic product, consumer sentiment for February and existing home sales for January, all scheduled for Friday..
U.S. data of late has been on the softer side. On Thursday, it showed core durable goods unexpectedly fell in January, while applications for jobless benefits rose again last week.
The euro rose 0.2 percent to $1.3572, having bounced from a low of $1.3451 on Thursday, which was not far from its nine-month trough of $1.3443 hit on EBS on Feb. 19.
But traders cautioned against reading too much on the move and said despite the bounce, sentiment towards the single currency remains negative.
"For now euro rallies should remain fragile and lower lows achieved," Westpac said in a note. "Naturally this provides us with support for our long dollar index position, targeting 82.0. We readily concede that the Greek tragedy is playing a vital role in the position's success at the moment."
Concerns over Greece and other peripheral euro zone countries' ability to pay their debts have driven the euro down more than 10 percent versus the dollar from its December highs.
Moody's Investors Service told Reuters on Thursday that any changes in its ratings on Greece would depend on whether Athens delivered on its fiscal reform plans. See.
Meanwhile, the Australian dollar remained under pressure, at $0.8893. The Aussie/yen at 79.43 yen, was looking bearish on the charts. (Additional reporting by Anirban Nag; Editing by Edwina Gibbs)