TOKYO, March 20 (Reuters) - The safe-haven yen rebounded from early steep declines and the risk-sensitive Australian and New Zealand dollars flipped to losses as early optimism ebbed over efforts by global authorities to contain a banking crisis.
Japan's currency, which is particularly sensitive to long-term Treasury yields, rebounded from losses as steep as 0.6% to last be flat against the dollar as the U.S. 10-year yield fell sharply heading into the start of European trading, reversing an earlier 12 basis-point rise.
The Aussie, which at one point had been up by 0.7% to a nearly two-week top of $0.6743, was last 0.2% lower at $0.6683, sliding back below the closely watched $0.67 mark. New Zealand's kiwi was 0.3% lower at $0.6250, giving up an earlier gain of as much as 0.7%.
Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity. That followed Swiss authorities' negotiation of a buyout of Credit Suisse (CSGN.S) by UBS (UBSG.S), but at a huge discount and with a $17 billion debt writedown.
"The market's driving force is risk aversion," said Takahiro Sekido, chief Japan strategist at MUFG.
"I'm not so pessimistic, but still we have to wait and see how much we will see risk contagion from Europe," he said. "At least within this week, I expect the yen will stay strong."
The yen last traded at 131.79 per dollar , keeping intact a 2.5% gain from last week.
The euro was about flat at $1.0671 and sterling was little changed at $1.2189, both erasing earlier small gains.
A Fed rate decision on Wednesday adds an additional layer of uncertainty. Traders are still of the view that a quarter point rise is likely but are now positioned for a peak in rates in May at around 4.8%, followed by a steady series of cuts into the end of the year.
The U.S. dollar index - which measures the currency against six major peers, including the yen and euro - was flat at 103.80, stabilising following last week's 0.7% slide.
"Almost regardless of Fed this week, (it's) hard to see risk markets quickly rowing away from banking sector concerns, leaving USD not too far from a safety bid," Ray Attrill, head of foreign-exchange strategy at National Australia Bank, wrote in a note to clients.
In cryptocurrencies, bitcoin took a breather after its surge to a nine-month high of $28,474 on Sunday, last trading 1.5% weaker at around $27,629.
Gold was flat at $1,989 an ounce, recovering from a decline of as much as 1%.
