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* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
* Safe havens yen and franc gain on safe-haven bid
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By Vatsal Srivastava
SINGAPORE, Dec 24 (Reuters) - The Japanese yen and the Swiss franc rose on safe-haven buying on Monday as investors grappled with political instability in the United States and fears of a global economic slowdown.
Trading volumes were thinning out with most global markets set to shut for Christmas, while Japan was closed on Monday for a holiday.
There was hardly any appetite among investors to take on risk, with a deteriorating outlook for global growth leaving stocks hurtling down for their worst quarterly performance since 2008.
That has attracted bids for the likes of the yen and Swiss franc, considered a safe-bet during times of economic and political stress. They were up about 0.1 percent each on the dollar in early Asian trade.
"The global equity market rout has been driving sentiment in the currency markets. I don't see any significant rebound in risk sentiment yet," said Stephen Innes, head of Asia trading, Oanda.
The dollar, also sought out as a safe-haven, managed to hold up despite troubles of its own, including a partial U.S. government shutdown.
The dollar index, a gauge of its value versus six major peers, held steady at 96.90, having risen 1 percent last week as investors shunned riskier assets.
In a widely expected move, the U.S. Federal Reserve hiked interest rates by 25 basis points last week for its fourth hike of the year, underpinned by a relatively robust U.S. economy compared with its peers elsewhere.
However, with the Fed signalling "some further gradual" rate hikes despite global risks, traders are growing increasingly nervous that higher borrowing costs would hurt corporate profits and put the brakes on the world's biggest economy.
The partial U.S. government shutdown which could continue to Jan. 3, when the new Congress convenes and Democrats take over the House of Representatives, has also contributed to the souring of risk sentiment.
There was also uncertainty in the Trump administration after the president on Sunday said he was replacing Defense Secretary Jim Mattis two months early, a move apparently driven by Trump's anger at Mattis' rebuke of his foreign policy.
The yen gained 0.2 percent, changing hands at 111.03. The heightened fears over slowing global growth benefited the Japanese currency the most last week; it rose 2 percent on the U.S. dollar, and against the Australian dollar, the yen put on a sizable 4 percent.
"Beyond risk-off, we can see dollar/yen sell off more towards 110 if the repatriation and hedging flows start to pick up," Innes said.