* Aussie's early gains unravel as crude oil resumes slump
* Dollar index edges down, though on track for weekly gain
* No major data out of Asia, eyes on China, U.S. stats
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, Jan 15 (Reuters) - The dollar edged down in Asian trade on Friday, erasing its early gains as slumping crude oil futures and Chinese shares eroded investors' appetite for risk, though it remained well above the week's lows and on track to end a volatile week modestly higher.
The greenback was about 0.1 percent lower against the Japanese currency at 117.91 yen JPY= , but still up about 0.4 for the week and holding above a four-month trough of 116.70 plumbed on Monday.
Against the yen, the euro was steady at 128.23 EURJPY=R , after it touched a one-week high of 128.75 yen overnight. It was on track for a flat weekly performance.
"The early risk-on mood today did not last, as Shanghai shares fell, and sentiment followed," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust in Tokyo.
Chinese shares extended earlier losses on Friday after new yuan loans in December came in well below the previous month's lending, while separate data also showed that broad M2 money supply growth slowed more then expected. yuan gained in early trade on Friday, though it was still down against the dollar since the start of the year.
The People's Bank of China (PBOC) set a slightly weaker mid-point rate for the yuan on Friday, but the fix has been broadly steady for more than a week, signalling a determination to hold the line against expectations of sustained depreciation. Dealers expected the yuan would resume its decline if the central bank loosened its grip. oil prices also undercut sentiment, market participants said. Oil prices continued their downward march on Friday as investors fretted about the possibility of additional Iranian crude dragging down an already oversupplied market. O/R
Bank of Japan Governor Haruhiko Kuroda on Friday blamed tumbling global oil prices for Japan's low consumer inflation, and reiterated to parliament that the country's price trend was improving steadily and reflecting a moderate economic recovery. policymaking counterparts at the European Central Bank said they saw scope for further cuts in their bank's deposit rate, according to minutes of their December meeting, yet many of them appeared sceptical about the need for further action in the near term. euro took back a bit of ground against the greenback, inching up about 0.1 percent to $1.0879 EUR= , though below Thursday's session high of $1.0943, and on track for a weekly loss of 0.4 percent.
The euro's rise pushed the dollar index .DXY down slightly to 98.962, though it was still up about 0.4 percent on the week.
The recently beleaguered Australian dollar gave up its early gains as risk sentiment and crude oil prices sagged. The Aussie nosed over 70 U.S. cents AUD=D4 , from a four-month trough of $0.6910 plumbed on Thursday, but was last down 0.5 percent at $0.6944.
Worries about slowing growth in China has chronically weighed down the Aussie, which is often used as a liquid proxy for China plays due to its massive trade exposure to that country. It suffered a 4.5 percent drop last week, and was down about 0.1 percent this week.
Sterling held its ground after Bank of England policymakers voted 8-1 to keep interest rates at a record low as expected and offered no great change to the bank's outlook, despite ructions on global markets. pound traded at $1.4402 GBP=D4 , down about 0.1 percent but holding above a 5-1/2 year trough of $1.4352 set on Tuesday.
In contrast, growing expectations of an interest rate cut by the Bank of Canada kept the loonie under pressure. The Canadian dollar was last at C$1.4386 CAD=D4 versus the dollar, up about 0.2 percent but not far off a new 12-year trough of C$1.4398 set overnight.
There was no major economic data out of Asia on Friday. U.S. retail sales numbers were due later in the day.