* AUD, NZD touch multi-month highs before swift retreat
* Yen extends gains on speculation of Fed yield-curve control
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
By Tom Westbrook and Stanley White
SINGAPORE/TOKYO, June 9 (Reuters) - The dollar nursed losses on Tuesday as surging commodity currencies paused for breath and a rising yen pointed to investor trepidation over the U.S. Federal Reserve’s next move.
The yen extended big overnight gains to a week-high 108.03 per dollar as investors weigh the possibility of stepped-up bond buying - or even simply a very dovish outlook - from the Fed which meets on Tuesday and Wednesday.
At the same time the Australian and New Zealand dollars swiftly retreated from milestone peaks in early trade.
The kiwi hit a four-and-a-half month high of $0.6576 on the first morning since New Zealand ended all social restrictions - save for its closed borders - after declaring the nation free of infections on Monday.
The Aussie briefly touched a 10-month top of $0.7040 and sterling made a three-month high of $1.2755, though all three pulled back to steady by mid-morning.
“Japanese names have been very active since Monday in dollar/yen, trying to trade off the chance of some kind of yield-curve control from the Fed,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities in Tokyo.
“I personally don’t think yield curve control is necessary now, but the dollar is under clear selling pressure.”
Last week U.S. jobs data for May caught markets completely off-guard with an unexpected increase in employment and over the weekend Chinese export numbers for last month were stronger than forecast.
“Economies are smashed, but not smashed as badly as was expected and I think that’s the key to this whole rally,” said Westpac FX analyst Imre Speizer in Auckland.
“The latest high-frequency data shows you that the recovery probably looking more like a V. It’s a relief rally, relief that it’s not as bad as feared.”
In New Zealand, an ANZ survey of traffic movement - seen as a forward indicator of economic growth - saw a sharp rebound in heavy vehicle traffic last month.
The virus also appears to be in retreat in Australia where re-opening is gathering pace, prompting RBC Capital Markets to make a modest improvement in its 2020 GDP forecast on Monday lifting it to better than -4% from -4.5%.
The World Health Organization on Monday warned that the COVID-19 pandemic is “far from over,” as a record number of new daily infections were reported.
But investors took comfort from cases trending lower in the United States and falling to a fresh low in New York, even as testing has ramped up.
“If we continue to trend lower ... this will go a long way in re-aligning consumer risk assessment about the virus,” said RBC Capital Markets’ Chief U.S. Economist, Tom Porcelli.
Elsewhere the Chinese yuan held on to chunky gains for the week so far.
Other moves were held in check as markets wait for the outcome of the Fed meeting. The euro last sat at $1.1304 and the pound at $1.2736.
A statement from the Fed is due at 1800 GMT on Wednesday followed by a news conference half an hour later.
It is not expected to change interest rate settings and, since last week’s job figures, futures pricing shows investors have abandoned expectations of rates dipping below zero next year. (Reporting by Tom Westbrook Editing by Shri Navaratnam)