* Dollar drops against yen as BoJ says more stimulus not needed
* Wall Street steadies after sell-off
* U.S. Treasuries prices dip ahead of note sale (Adds U.S. trading, quotes and recent prices)
By Michael Connor
NEW YORK, April 8 (Reuters) - The dollar and euro fell sharply against the yen on Tuesday as hopes for additional stimulus out of Japan faded, while world equity markets were relatively stable after three days of losses.
U.S. Treasury prices surrendered some recent gains as the greenback fell. Wall Street clawed back some ground after three days of steep losses.
For the second time this week, policymakers from a major central bank dashed expectations for additional stimulus, with the governor of the Bank of Japan, Haruhiko Kuroda, saying Tuesday that there was no need for more monetary support to escape deflation.
Investors had expected the BoJ to indicate more support was forthcoming, and the yen rose as the Bank of Japan kept its policy steady.
“You had a lot of players who were short the yen, and Kuroda dashed the hopes of stimulus,” said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
The comments from the Bank of Japan followed remarks on Monday by several policymakers from the European Central Bank that they would increase policy easing only if they thought the inflation outlook had deteriorated sharply.
Against the yen, the dollar lost 0.8 percent, to hit a 10-day low of 102.23 yen, while the euro shed 0.5 percent to 141.01 yen, the lowest level in more than a week.
The yen had been under pressure in recent days on expectations that a rise in Japan’s sales tax, which took effect in at the start of April, would hurt consumption, and that the BoJ might have to ease policy in coming months to soften the blow.
The dollar index, which measures the dollar against a basket of six major currencies, was off 0.57 percent and near lows last seen on March 19.
Wall Street, after a wave of selling over three days that caused the biggest drop for the tech-focused Nasdaq since late 2011 and the biggest drop in two months for the S&P 500 and Dow Jones indexes, rose on Tuesday, led by the tech sector.
The Dow Jones industrial average rose 28.83 points or 0.18 percent, to 16,274.7, the S&P 500 gained 6.14 points or 0.33 percent, to 1,851.18 and the Nasdaq Composite added 34.175 points or 0.84 percent, to 4,113.927.
The U.S. earnings season gets under way this week. Aluminum producer Alcoa Inc will report after the market close on Tuesday. Financials JPMorgan Chase & Co and Wells Fargo & Co will issue results on Friday.
Global stock markets were mixed, with the MSCI world equity index up 0.07 percent.
U.S. Treasuries prices, after two days of strong gains, dipped on Tuesday ahead of a $30 billion three-year note sale, the first of $64 billion in new coupon-bearing supply this week.
Yields rose back from one-week lows as investors turned their attention to the impending supply and considered whether the yields would be attractive enough in the auctions after the recent rally.
Benchmark 10-year notes were last down 2/32 in price to yield 2.72 percent, up from 2.70 percent late on Monday. Thirty-year bonds US30YT=RR fell 4/32 in price to yield 3.57 percent, up from 3.56 percent.
Rising tensions in Ukraine may temper investor appetite for risk. Police detained 70 people occupying a regional administration building in eastern Ukraine overnight, but pro-Moscow protesters held out in a standoff in two other cities, in what Kiev called a Russian-led plan to divide the country.
World financial powers are set to gather this week at the International Monetary Fund’s spring meeting. Washington engaged in some pre-meeting jockeying with China, warning Beijing that recent depreciation of the Chinese currency could raise “serious concerns.”
Much of the focus is likely to concentrate on Russia’s moves into Ukraine, which have been met with the threat of stronger sanctions from the West, though Russian stocks and the rouble seemed largely unconcerned on Tuesday.
European shares and bonds fell. London’s top share index hit a two-week low, and Paris and Frankfurt were off about 0.75 percent.
Asian stocks managed to shrug off Monday’s gloom from Wall Street. Chinese shares, particularly those of banks, rose on stimulus hopes and helped to take MSCI’s benchmark emerging market index to its highest level since mid-December.
Japan’s Nikkei fell 1.4 percent on concern over global tech stocks.
In commodity markets, safe-haven gold was trading around two-week highs, up about 1 percent from the previous session at $1,309.70 an ounce.
U.S. crude for May gained 0.6 percent to $101.01 a barrel, pushed up by the renewed tensions over Ukraine, a major supply route for Russian gas to Europe. But the rise was capped by expectations U.S. crude oil stocks were building up.
Brent rose 0.2 percent to $106.01 a barrel. (Reporting by Michael Connor in New York; additional reporting by Marc Jones in London; editing by Leslie Adler)