FOREX-Yen firm on safety bids, euro and pound fragile

* Yen keeps gains, strong on the pound and euro

* Sterling under pressure on dismal UK fundamentals

SYDNEY, 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 hovered near 1-year highs against the euro at 120.70 yen and near 11-month peaks on the pound at 136.00 yen.

Sterling was on the defensive at $1.5259, having tumbled to a 9-month low on Thursday, hurt by dismal fundamentals in the UK. [ID:nLDE61O14G]. The pound even fell sharply against the euro , becoming the whipping boy of the market.

A slew of Japanese data, including January industrial output and retail sales are out on Friday, but traders say, domestic data usually has very little impact on the Japanese currency. The yen is favoured by investors seeking safe-haven assets when doubt over an economic recovery gathers ground.

Japan's core consumer prices fell 1.3 percent in the year to end January, compared to a Reuters poll of a 1.4 percent fall, confirming the economy remained mired in deflation.

Against the dollar, the yen slipped from highs to trade at 89.20 yen , with near term resistance seen around 88.55 yen, this month's peak. It gained over 1 percent on Thursday, rising to as high as 88.78 per dollar, its highest in three weeks.

The dollar index <.DXY> was down at 80.73, 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. [ID:nN2597849]

The euro , held ground above $1.3500, having bounced from a low of $1.3450 on Thursday, which was not far from its nine-month trough of $1.3442 hit on Feb. 19.

But traders cautioned against reading too much on the move and said despite the bounce, sentiment on 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 [ID:nTOE61O07J].

Meanwhile, the Australian dollar remained under pressure, at $0.8877. The Aussie/yen at 79.10 yen, was looking bearish on the charts, with the pair staging an outside day reversal in the previous session.

(Editing by Wayne Cole)