(Updates after European open)
* Japanese output, retail sales fall more than forecast
* Aussie, Canadian dollars dip as oil sell-off resumes
* Yuan edges down after marking first weekly rise in 8 weeks
By Patrick Graham
LONDON, Dec 28 (Reuters) - The dollar inched away from a two-month low against the yen on Monday, while a resumption in falls in oil prices took linked currencies including the Australian and Canadian dollars around a third of a percent lower.
Australia and the key London market in currencies were among those still closed for local holidays and the major dealing rooms across Europe were empty or operating on skeleton staffing. HOLIDAY
But there was still movement in a number of assets on the back of another 1 percent fall in oil. For the Aussie, weekend industrial profits data out of China also bode ill for the start of 2016, when a number of major bank analysts have said the Australian currency could fall sharply. ID:nL3N14C2I6
"Liquidity will probably be low in the run-up to New Year," said Marshall Gittler, head of investment research at FXPrimus Europe.
"There could be some sudden moves though as small orders can move the market unpredictably. Volatility tends to increase towards the end of the year."
The Australian dollar fell 0.4 percent ot $0.7258 AUD= while is Canadian counterpart dipped 0.3 percent to $1.3856, heading back towards this month's 11-year lows. CAD=
Against the yen, the dollar was last up just over 0.1 percent at 120.62 yen JPY= , off a session low of 120.17 yen as well as its Friday low of 120.05 yen.
Japanese data released earlier on Monday was yen-bearish, although the market's reaction was muted.
Japan's industrial output fell 1.0 percent in November from the previous month, more than the median market forecast for a 0.6 percent drop, suggesting that sluggish emerging market demand continues to cloud the economic outlook. urn:newsml:reuters.com:*:nL3N14E10X
Separate data showed Japanese retail sales fell 1.0 percent in November from a year earlier, more than a median market forecast for a 0.6 percent fall.
Those figures came on the heels of mixed data on Friday that rekindled speculation that the Bank of Japan might eventually opt to take additional stimulus steps to meet its goal of sustainable 2 percent inflation. urn:newsml:reuters.com:*:nL3N14D3OV
The euro rose about 0.4 percent against the yen to 132.19 EURJPY= and also added about 0.1 percent against the dollar, changing hands at $1.0977 EUR= .
The dollar index .DXY , which gauges the greenback against a basket of six counterparts, was broadly flat at 97.965.
China's yuan edged down against the dollar after marking its first weekly rise in eight weeks. The People's Bank of China, prior to market open, set the midpoint rate CNY=SAEC at 6.475 per dollar, or 0.06 percent weaker than the previous fix of 6.4713.
(Editing by Jacqueline Wong and Andrew Heavens)