* Dollar edges up against euro, yen
* Sterling extends losses after Friday’s slide
By Shinichi Saoshiro
TOKYO, Dec 18 (Reuters) - The dollar held modest gains against the euro and yen on Monday, having received a lift after U.S. tax reform efforts moved another step closer to ratification over the weekend.
The U.S. currency had edged higher after Republicans on the House-Senate negotiating committee on Friday put the finishing touches on a sweeping tax overhaul that involves large corporate tax cuts.
Top Republicans are confident the Congress will now pass the tax bill this week, with a Senate vote as early as Tuesday and President Donald Trump aiming to sign the bill by week’s end.
The dollar’s gains, however, were limited as investors adopted a wait-and-see approach until the deal was sealed.
It was 0.1 percent higher at 112.750 yen, while the dollar index against a basket of six major currencies tacked on 0.1 percent to 94.007.
“The Senate and House will now vote on the tax bill this week and there appears to be some residual concern that all might not go smoothly, especially with some senators facing health issues,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
Senators Thad Cochran and John McCain have been ill in recent weeks and have missed votes.
“The U.S. government also faces a shutdown if it does not extend a spending deal beyond Dec. 22. While the tax bill is likely to be passed and a government shutdown is also likely to be averted, both these concerns have to be assuaged before the dollar can rise,” Yamamato at Mizuho Securities said.
The euro extended Friday’s modest losses and dipped 0.05 percent to $1.1744.
On Friday Germany’s Social Democrats (SPD) agreed to open exploratory talks on forming a government with Chancellor Angela Merkel, providing a chance to end a rare period of political deadlock in Europe’s largest economy.
The euro did not draw much support though as the talks between the German parties are not expected to begin in earnest until January.
The pound remained on the defensive after sliding about a percent against the dollar on Friday on profit taking after news that Brexit negotiations would move to the second round in January.
Sterling was 0.1 percent lower at $1.3317.
The Australian and New Zealand dollars were little changed at $0.7644 and $0.7000, respectively.
Bitcoin was down 2.9 percent at $18,400 on the Bitstamp exchange. It rose to a record high of $19,666 on Sunday, the day CME Group Inc launched its own contract to wager on the cryptocurrency. (Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)