NEW YORK — Embarrassed by their blowout loss the night before in Detroit and forced to contemplate the prospect of settling for the wildcard, the New York Yankees bought themselves more time — if nothing else — in the chase for first place in the American League East last night.

Johnny Damon, whose last home run here in a Red Sox uniform spelled the beginning of the end for the 2004 Yankees, kept his team’s fleeting hopes alive with a two-run homer in the seventh off Daisuke Matsuzaka, handing the desperate Yanks a 5-3 decision over the Red Sox.

“We had a tough day yesterday,” said Damon, “so this is a good way to kick off a homestand. Granted, we’re still back of the Red Sox, but we need to worry about ourselves and win ballgames and that’s exactly what our club went out and did today.”

The Red Sox saw their four-game winning streak stopped in its tracks, while the Yankees sliced a game off the Red Sox’ lead in the American League East, which now stands at seven games. It was New York’s fourth win in the last five meetings between the two.

“We’re still approaching things the way we need to,” said Jason Varitek, whose solo homer in the top of the seventh tied things at 3-3 before Damon helped the Yankees regain the lead. “The only thing we’re worried about is playing good baseball.”

The Sox’ offensive support of Matsuzaka has been an issue for much of the season, with the team limited to two runs or fewer in 12 of his previous 16 starts. But another ominous trend — the pitcher’s own inability to protect leads or preserve ties — surfaced again last night.

He surrendered a 1-0 lead in Tampa Bay last Wednesday in a 2-1 loss, then last night twice re-gifted the lead after the Sox had come from behind to tie the score.

“I think all responsibility for our losses belong to me,” said Matsuzaka, who lost his fourth straight start to drop to 13-11.

Matsuzaka attempted to ride a fastball in on Damon with pinch-runner Wilson Betemit on second, but didn’t get it far enough in and Damon pulled it down the line to the inviting right field porch.

“He didn’t locate it,” acknowledged Francona of the offending pitch.

Down by two with two innings to go, the Sox got their first look at Yankee phenom Joba Chamberlain, who allowed a leadoff walk to Kevin Youkilis and a two-out single to Mike Lowell before overpowering J.D. Drew for the third out.

Mariano Rivera struck out two in the ninth for the save.

The Sox never led and spent the game playing from behind, a reversal of the season-long chase in the standings.

Trailing 2-0 early, the Sox began their climb back with a leadoff opposite-field homer from Manny Ramirez, giving him at least 20 home runs for 13 consecutive seasons.

The Sox pulled even in the third when Julio Lugo shot a triple into the left-center gap to open the inning, then trotted home when David Ortiz launched a sacrifice fly to deep left.

In the fourth through the sixth innings, the Sox put the leadoff man on twice and got a one-out single once, but failed to advance any of the runners to second — much less home.

More times than not, Matsuzaka has an inning in which he struggles with his command, and last night it came right away.

Damon has led with a single to center and was joined on base one out later by Bobby Abreu, who drew a walk. Matsuzaka then buried a pitch into the small of Alex Rodriguez’s back, drawing a chorus of boos from the stands and filling the bases.

He got countryman Hideki Matsui to hit into a fielder’s choice as Damon scored. But he failed to limit the damage there, as Jorge Posada laced a double down the left-field line, delivering Abreu.

Matsuzaka retired 12 of the next 13 before Derek Jeter took him out the opposite way, snapping an 87 at-bat homerless streak for the Yankee captain.

smcadam@projo.com