FOREX-Euro holds steady after EU vote shows pro-Europe parties cling to majority

* Pro-EU parties fragmented, but cling to majority in election

* Euro off 2-year low, sterling little moved

* Yen flat, Trump sees Japan trade deal after July elections

* Graphic: World FX rates in 2019

TOKYO, May 27 (Reuters) - The euro barely budged in early Monday trade after pro-European Union parties held on to two-thirds of seats in the EU parliament elections, limiting gains in nationalist opponents.

The common currency was little changed at $1.1210 in Asian trade and off a two-year low of $1.11055 touched on Thursday, as the markets studied the outcome of the vote.

While centre-right and centre-left blocs are losing their shared majority, surges in the Greens and liberals meant parties committed to strengthening the union held on to two-thirds of seats, official projections showed.

The results dented the hopes of anti-immigration, anti-Brussels National Rally led by Marine Le Pen, Italian Deputy Prime Minister Matteo Salvini and others who have been opposing attempts to forge closer EU integration.

“The focus is on how each government will react and how the Brexit negotiations will play out after this elections. So far we’ve seen limited market reaction as far-right, populist parties didn’t do as well as some had feared,” said Shin Kadota, senior FX and rates strategist at Barclays.

Trading was seen subdued on Monday due to market holidays in London and New York.

The dollar was little changed against other currencies.

The U.S. currency traded at 109.35 yen, not far from a three-month low of 109.02 touched two weeks ago, hit amid worries about escalating tensions between Washington and Beijing over trade and technology.

The dollar has been also capped against the yen as U.S. President Donald Trump is seen putting pressure on Japan to take measures to reduce its trade surplus with the United States.

Trump, who arrived in Tokyo on Saturday, tweeted on Sunday that much of the trade negotiation with Japan will wait until after the country’s election in July.

The British pound was steady at $1.2725, having regained some ground after Prime Minister Theresa May set out a departure date, bouncing back from a 4-1/2-month low of $1.2605 set on Thursday.

But the prospect of a “no deal” Brexit was fast becoming the central battle of the race among contenders to succeed May, with four of eight leadership hopefuls having said Britain must leave the EU on Oct. 31 even if this means a no-deal Brexit. (Editing by Shri Navaratnam)