* U.S. non-farm payrolls report showed solid jobs creation * Dollar trims losses vs yen By Gertrude Chavez-Dreyfuss NEW YORK, June 7 (Reuters) - The dollar recovered in choppy trading on Friday as a government report showed a reasonably healthy pace of U.S. job creation last month, suggesting a stabilizing labor market. Investors had been pricing in a downbeat number going into the non-farm payrolls data after Wednesday's softer-than-expected U.S. private-sector employment survey and a weak employment figure in the Institute for Supply Management's non-manufacturing report. The report showed that the U.S. economy created 175,000 jobs last month, with the unemployment rate edging higher to 7.6 percent. However, analysts were heartened by the separate household survey, which showed employment of 319,000 in May. Still, the report does not resolve questions about whether the Federal Reserve would start cutting-back its quantitative easing program. Traders of short-term U.S. interest rate futures continued to expect the Fed to hold rates near zero until early 2015. "It's a better-than-expected report, if just barely so," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. "I think the markets will view this favorably. There is still a lot of uncertainty about the direction of interest rates, though, and this will be a volatile summer. The debate about tapering by the Fed will not be resolved by Labor Day." In early New York trading, the euro fell 0.3 percent on the day. It hit a three-month peak of $1.3306 on Thursday after European Central Bank President Mario Draghi gave no hints that further monetary easing was imminent. The dollar, meanwhile, trimmed losses against the yen to trade at 97.12 yen, up 0.1 percent. Just before the U.S. jobs report, the dollar was down 1.6 percent. On Thursday, the greenback suffered its biggest one-day fall against the yen in three years.