* Net short positions in yen still large * Such market positioning may support yen - analyst * Euro remains under pressure as Spain worries persist * Options reflect abating unease about euro prospects By Julie Haviv NEW YORK, April 9 (Reuters) - The dollar fell to a one-month low against the yen on Monday as last week's disappointing U.S. employment data bolstered views the Federal Reserve could ease monetary policy further to boost the economy. The safe-haven but low-yielding yen attracted investors after the U.S. Labor Department's report on Friday showed that U.S. employers created far fewer jobs in March than financial markets had expected. The report raised doubts over the ability of the United States to help boost the global economy as the euro zone debt crisis continues and as fears persist about China's ability to avoid a hard economic landing. The data suggested the Federal Reserve's policy-setting Federal Open Market Committee will keep interest rates low until at least 2014; low rates have been a key source of weakness in the dollar. "The dollar debate is where the center of FOMC gravity now is with respect to further stimulus and what degree of economic weakness it would take to get stimulus back on the agenda," said Steven Englander, head of G10 strategy at CitiFX, a division of Citigroup in New York. If the Fed opts to embark on a third asset purchase program, known as quantitative easing, that would be negative for the dollar because it is tantamount to printing money. Barclays said it does not believe the weak employment report will be enough to push the Fed into action at its next policy meeting on April 24-25, but the situation remains fluid. "That said, the door for further accommodation remains open, and the decision point may shift to June as the FOMC continues to monitor incoming data," the bank said. The dollar fell as low as 81.18 yen, according to Reuters data, its lowest level since March 8, before paring losses to trade at 81.38 yen, down 0.3 percent. Trade, however, was light, with many European markets closed for public holidays. One possible support for the dollar lies at 81.07 yen, a trader said, which is the 38.2 percent retracement of its rally in February-March. The greenback could drop to around 80.00 yen in the next week or two, especially when taking into account current market positioning, said Daisuke Karakama, a market economist for Mizuho Corporate Bank in Tokyo. "When you look at short positions in the yen, they haven't really decreased, and their size is still comparable to levels seen back in the summer of 2007," Karakama said, adding, "You have to think about whether that is sustainable or not." One risk for the yen this week is the Bank of Japan's two-day policy meeting that ends on Tuesday. The central bank's policy has been under the spotlight since its surprise monetary easing in February triggered a broad fall in the yen. The BOJ is seen refraining from easing monetary policy and holding fire, however, until it unveils its long-term economic and price forecasts on April 27. The latest data from the U.S. Commodity Futures Trading Commission shows currency speculators slightly trimmed their net short positions in the yen in the week ended April 3 to 65,108 contracts. That was still close to the previous week's 67,622 contracts, which was the biggest net short position in the yen since July 2007. EURO BOUNCES FROM LOWS Against the dollar, the euro bounced from a three-week low of $1.3031 and last traded at $1.3118, up 0.2 percent on the day. The euro also slid against the yen, hitting a one-month low near 106.08 yen and last traded at 106.78, roughly flat on the day. But recent dismal data from the euro zone, fears about Spain's high debt levels, and expectations that European monetary policy should keep euro gains contained. Unease about the prospects for the euro, however, has abated somewhat as reflected in the options market, with three-month risk reversals in the euro/dollar still biased for euro puts, trading at -2.0 vols on Monday, but improving from -3.5 vols in mid-February. Euro/yen three-month risk reversals remained biased for euro puts, trading at -3.45 vols, but that is down from -3.68 vols in early March. The Australian dollar traded 0.1 percent higher against the U.S. dollar at 1.0316 after dropping as low as 1.0253 on news that China's annual inflation rate jumped more than expected in March. "The main weight on the Australian dollar presently appears to be coming from increasing expectations of a rate cut next month by the RBA (Reserve Bank of Australia), but China's news is unlikely to be helpful," Brown Brothers Harriman wrote in a report.