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* European stocks slip, supporting yen and Swiss franc
* Euro stays above Friday's 5-month low vs dollar
* Holiday in Japan saps currency markets
By Anirban Nag
LONDON, July 21 (Reuters) - The yen and Swiss franc climbed on Monday, supported by safe-haven inflows as European stocks stumbled, while the dollar was pegged back against the euro by subdued U.S. yields.
Volumes were light though, due to a holiday in Japan. Germany's stock index fell to a two-month low, helping the yen and the Swiss franc, which are often sought during times of financial market stress and uncertainty over growth.
The euro eased against the yen to 136.89 yen in the European session, not far from a five-month low of 136.66 yen hit late last week. It also slipped against the Swiss franc to trade at 1.2147 francs.
However, the common currency held its ground against the dollar, trading steady at $1.3525 and staying well above Friday's five-month low of $1.3491. Support is seen at $1.3460/80, an area that has provided a floor on several occasions in the past 10 months or so.
The dollar was also slightly lower at 101.30 yen, with dollar bulls increasingly frustrated by U.S. yields , which were anchored near recent lows. The dollar also fell against the Swiss franc.
"Growth in the U.S. is soft and rate hikes are further away," CIBC World Markets currency strategist, Patrick Bennett, said. "So the recent ranges that have held in the euro/dollar should be respected."
The downing of a Malaysian airliner in eastern Ukraine last week and fighting in Gaza continued to dominate the headlines, with investors keeping a wary eye. But traders and analysts said these events had not led to panic, for now. Nevertheless, they kept a bid tone on traditional safe-haven currencies.
"Layered on top of the prevailing geopolitical risks and the adjustments to Bank of Japan policy expectations, there would appear to be good reason to expect the yen to maintain a firm profile near term," Rabobank senior currency strategist Jane Foley said.
Last week, the BoJ gave upbeat signals on the Japanese economy and few hints about more monetary easing.
Morgan Stanley put out a "sell" recommendation on the euro/yen. They expect the BoJ keep rates on hold for now, while the European Central Bank is expected to be accommodative given low inflation. They target euro to drop to 132.50 yen. (Additional reporting by Ian Chua in Sydney; Editing by Louise Ireland)