FOREX-Euro near 6-mth highs, pound sags vs yen after Manchester blast

* Euro buoyant after Merkel says currency is “too weak”

* Common currency hovers near 6-mth high of $1.1264

* Pound sags vs yen after Manchester blast, but steady vs dollar

TOKYO, May 23 (Reuters) - The euro hovered near a six-month high against the dollar on Tuesday after German Chancellor Angela Merkel said the currency was “too weak,” while the pound sagged against the yen after a blast at a concert in Britain’s city of Manchester killed at least 19 people.

Sterling shed 0.45 percent to 144.07 yen, but otherwise the currency was fairly steady against its major rivals.

It was little changed against the dollar at $1.2994 . On Monday, the pound had lost about 0.3 percent after polls showed a narrowing lead for Prime Minister Theresa May over her opposition ahead of elections next month.

Police said they were responding to reports of an explosion at a concert in the English city of Manchester where U.S. singer Ariana Grande had been performing. At least 19 people dead and about 50 injured in what British police said was being treated as a terrorist incident. The dollar was down 0.2 percent at 111.055 yen after a dip to 110.860 and the euro slid 0.2 percent to 124.830 yen .

Merkel said on Monday that the common currency is weak due to the European Central Bank’s monetary policy, pointing out that this helped explain Germany’s relatively high trade surplus.

The chancellor’s comments provided fresh momentum to the euro, which has been on a bullish footing since the French presidential elections earlier this month. Upbeat euro zone data and a widening spread between the 10-year German and U.S. government bond yields have also supported the currency.

The euro was steady at $1.1240 after touching $1.1264 overnight, its highest since Nov. 9.

“While the ebb in French political risk and prospects of a ECB policy shift have helped the euro, the biggest support factor still remains the recent weakening of the dollar in wake of ‘Russiagate,’” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Merkel’s comments was extra fuel for the euro...that said, a weaker dollar is not necessarily a bad thing for Trump.”

The Australian dollar dipped 0.2 percent to $0.7470 and the New Zealand dollar nudged up 0.1 percent to $0.7004 . (Editing by Shri Navaratnam)