* Dollar slips on changed Fed rate hike views
* Yen advances on few signs of Bank of Japan easing
* New Zealand, Australian dollars gain (Updates prices, adds new analyst comments)
By Sam Forgione
NEW YORK, June 11 (Reuters) - The dollar edged lower against a basket of major currencies on Wednesday for the first time in four sessions after traders dismissed expectations of an early Federal Reserve rate hike, while the yen advanced on few signs of further easing from the Bank of Japan.
Traders abandoned the notion that recent strong U.S. economic data and hawkish comments from a Federal Reserve official signaled a less accommodative stance at the central bank’s meeting next week. Benchmark U.S. government bond yields were mostly flat, which limited the dollar’s upside.
“This week’s earlier move was because of the expectations of an earlier rate hike, but now those (expectations) have been dashed,” said Chris Gaffney, senior market strategist at EverBank Wealth Management in St. Louis.
He said traders sought higher-yielding currencies such as the Australian and New Zealand dollars partly in response to the European Central Bank cutting rates to record lows last week.
The euro was modestly weaker against the dollar on the day, and hovered near a four-month low of $1.3503 set last Thursday soon after the European Central Bank cut rates to record lows.
The ECB’s move continued to weigh on the currency, which traders sold in favor of the yen, Australian dollar and New Zealand dollar.
“The euro’s weakness is more or less the reverberation from last week’s ECB meeting,” said Martin Schwerdtfeger, FX strategist at TD Securities in Toronto. “The overall trend for the currency remains lower,” he said.
Traders said the prospect of the Reserve Bank of New Zealand imminently hiking rates by 25 basis points to 3.25 percent made the New Zealand currency more attractive.
Recent strong Japanese economic data, meanwhile, gave little reason to expect further Bank of Japan monetary easing, which boosted the yen. Japan’s economy grew an annualized 6.7 percent in the first quarter, beating initial estimates.
“The market is expecting no change in policy, no more additional stimulus from the Bank of Japan,” said Gaffney of EverBank.
The U.S. dollar index, which measures the U.S. dollar against a basket of six major currencies, slipped 0.05 percent to 80.782. The euro was last down 0.13 percent against the dollar at $1.353.
The dollar marked a more than one-week low against the yen , and was last down 0.31 percent currency at 102.01 yen. The euro was last down 0.43 percent against the yen at 138.045 as traders sold the shared currency to buy yen.
The New Zealand dollar was last up 0.41 percent at $0.855 after hitting $0.8576, its highest level in nearly three weeks, while the Australian dollar was last up 0.06 percent at $0.9383.
Benchmark 10-year U.S. Treasury notes were last down 1/32 in price to yield 2.642 percent.
Reporting by Sam Forgione; Additional reporting by Anirban Nag in London; Editing by Meredith Mazzilli and Nick Zieminski