FOREX-Dlr falls ahead of next Treasury auction hurdle
* Investors await auction of 30-yr Treasury bonds
* NZ dollar jumps after RBNZ holds rate at 2.5%
* Aussie climbs on data showing smaller job losses in May
* Nikkei briefly rises above 10,000 to hit 8-month high
* Japan's revised Q1 GDP -3.8%, impact on market limited
By Kaori Kaneko
TOKYO, June 11 (Reuters) - The dollar fell against a basket of currencies on Thursday, paring some gains made after the benchmark U.S. Treasury yield hit its highest point in eight months the previous day.
The New Zealand dollar jumped after the Reserve Bank of New Zealand left interest rates on hold while the Australian dollar also climbed after data showed employment fell by far less than expected in May.
Higher oil prices and the Nikkei share average .N225 breaking above 10,000 to hit an eight-month high also helped boost risk appetite and the shift to commodity-linked currencies, dealers said. [O/R] [.T]
But trade overall was rather subdued in Asia as investors await an auction of 30-year Treasury bonds later in the day amid concerns over the ballooning budget deficit in the United States, dealers said.
U.S. interest rate moves have been one of the major themes for the currency market since talk of the Federal Reserve possibly hiking rates by the end of the year emerged in the wake of jobs data last week.
"The market does not seem to have a fixed view on how to take the talk of Fed interest rate hikes as well as the recent spike in Treasury yields," said Yousuke Hosokawa, treasury department senior manager at Chuo Mitsui Trust and Banking.
"It looks like the market is taking factors such as yield moves and stocks as an excuse to change positions," he said.
U.S. Treasury prices fell on Wednesday, sending the benchmark 10-year yield up to 4.0 percent for the first time in eight months after an auction of 10-year notes. [US/]
"It's hard to envisage that the Fed will raise interest rates anytime soon given the economic fundamentals, but on the other hand there are supply concerns in the U.S.," said a dealer at a Japanese bank.
"The focus will be whether any comments or hints will come out as to what the Fed might decide at its next policy meeting to make investors feel more comfortable about buying Treasuries," he said.
The market took in its stride Japan's revised gross domestic product for the first quarter, which showed the economy shrank 3.8 percent from the previous quarter, less than economists' forecast for a 4.0 percent contraction. [JPGDR1=ECI] The dollar index, a gauge of the greenback's performance against six other major currencies, fell 0.3 percent to 80.032 .DXY from late U.S. trade on Wednesday.
The euro rose 0.3 percent to $1.4022 EUR= and was 0.2 percent higher at 137.45 yen EURJPY=R.
Against the yen, the dollar slipped 0.1 percent to 98.01 yen JPY=.
Russia's central bank said on Wednesday it will diversify its currency reserves by cutting U.S. Treasury purchases and buying IMF-backed bonds. That drove the dollar lower but it later recovered, and analysts said any Russian plans to diversify away from dollars would take time. [ID:nLA1052951]
The New Zealand dollar rose after the Reserve Bank of New Zealand (RBNZ) kept its key interest rate steady at a record low 2.5 percent, the first pause in nearly a year, but left the door open to resume its aggressive easing cycle to combat recession. [ID:nWEL502629] [NZD/]
The kiwi climbed as high as $0.6372 NZD=D4 after the decision and it was later trading at $0.6356, up 0.9 percent on the day. The currency rose 0.9 percent to 62.30 yen NZDJPY=R.
The Australian dollar climbed 1.1 percent to $0.8103 AUD=D4 and 0.9 percent to 79.42 yen AUDJPY=R after Australia's jobless report for May showed only 1,700 job losses, which was much smaller than the market forecast of 30,000 job losses. [AUEMP=ECI] (Editing by Edwina Gibbs)
