* Obama tells Boehner can talk once default threat removed * Dollar edges higher against yen but remains on defensive * Fed to release meeting minutes on Wednesday NEW YORK, Oct 8 (Reuters) - The dollar remained near its recent eight-month low against major currencies on Tuesday as U.S. lawmakers struggled to find a solution to the country's budget and debt problems that could potentially lead to a default if left unresolved. Against the yen, the dollar edged up from a two-month low although it gave up some gains in the New York session. Analysts said the U.S. currency will likely stay under selling pressure as long as the standoff in Washington is unresolved. President Barack Obama told Republican Speaker of the House of Representatives John Boehner on Tuesday he would be willing to negotiate with Republicans once the U.S. government is re-opened and the threat of a default is lifted, the White House said. Boehner renewed calls to Obama to have a conversation with his party at a press conference on Tuesday morning. Flanked by Republican leadership, he said "there is no line in the sand" drawn by his party over fiscal negotiations. "With the U.S. government still shuttered, traders and investors are unwilling to push the market too heavy in either direction," said Scott Smith, market analyst at Cambridge Mercantile Group in Calgary, Alberta. The dollar index, which measures the U.S. currency's value against a basket of currencies, rose 0.1 percent to 79.993, not far from last Thursday's eight-month low of 79.627. With the partial U.S. government shutdown in its second week and only nine days left for Congress to raise the U.S. debt ceiling, Obama said he would accept a short-term increase to avoid a default. Congress must reach a deal by Oct. 17, when Treasury Secretary Jack Lew has said the government will run out of money to pay its bills. The dollar rose 0.3 percent to 96.93 yen, having dropped to 96.55 yen in Asian trade, its lowest since Aug. 12. It then recovered to trade back above chart support at 96.72 yen, its 200-day simple moving average. Since it last traded below that measure, in mid-November 2012, the dollar has gained 21 percent against the yen. The euro was down 0.1 percent at $1.3573, pulling away from an eight-month high of $1.3645 touched on Thursday. It showed little reaction to data which showed German industry orders unexpectedly fell in August although the trend was still for growth. Fears of a U.S. default drove interest rates on U.S. one-month government debt to their highest since August 2011. The International Monetary Fund said a U.S. debt default is unlikely but could have catastrophic consequences for the world. "There are some hints that investor concerns are starting to increase," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities LLC in New York. China and Japan, the United States' biggest creditors, are increasingly worried the U.S. government shutdown and standoff over the debt ceiling could wreak havoc on their trillions of dollars of investments in U.S. Treasury bonds. The impasse has distracted investors from what had been their main preoccupation: the timing of the Federal Reserve's reduction of its stimulus, which should lift the dollar. On Wednesday, the Fed will release minutes from its policy meeting last month, when it shocked markets by deciding not to begin reducing its $85 billion a month bond-purchase program. The higher-yielding and riskier Australian dollar rose after upbeat surveys on Australian employment and business confidence. It last traded up 0.1 percent at $0.9432, paring gains as risk appetite decreased. Some AU$1.47 billion changed hands during the global session on Tuesday, using Reuters Dealing data.