* Upbeat U.S. non-farm payrolls data supports dollar
* Dollar gains against euro on higher U.S. yields
* Yen weaker against dollar despite GDP revision (Updates prices, changes byline, dateline, previous LONDON)
By Sam Forgione
NEW YORK, June 9 (Reuters) - The dollar rose against a basket of major currencies on Monday in the wake of last week’s sturdy U.S. jobs report, with bids supported by higher U.S. government bond yields compared to those of European counterparts.
The dollar extended gains against the euro after the European Central Bank unveiled its latest monetary policy measures to combat deflation last week, which included cutting its main rates to record lows.
“People are feeling that the risk versus the reward isn’t there in the euro,” said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
He said traders feared a bigger drop in the euro since low interest rates in the euro zone did not reflect risks inherent in the region, including high debt ratios. German Bunds outperformed their U.S. counterparts, driving the 10-year yield gaps to 2005 and 2010 levels respectively.
Benchmark 10-year U.S. Treasury notes were last down 8/32 to yield 2.624 percent.
The dollar also held gains broadly after the government said Friday the U.S. economy added 217,000 non-farm jobs and brought employment to its pre-recession levels, indicating the economy had snapped back from a harsh winter.
The U.S. dollar index, which measures the U.S. currency against a basket of six major currencies, was last up 0.31 percent at 80.664. The euro was last down 0.41 percent against the dollar at $1.3587. The dollar was up 0.45 percent against the Swiss franc to trade at 0.8973 francs.
That was still some distance, however, from a four-month low of $1.3503 hit last Thursday after the ECB announced its monetary stimulus measures. The dollar was last up 0.06 percent against the Japanese yen at 102.53.
The dollar’s strength against the euro after the ECB measures broadened to include strength against other currencies, including the yen, despite a big upward revision of first-quarter Japanese growth.
Japan’s economy grew an annualised 6.7 percent in the first quarter, data showed on Monday, up sharply from an initial reading of a 5.9 percent rise, and confirmed the fastest pace of growth since July-September 2011. The data beat a median market forecast for GDP to grow 5.6 percent.
“The data is consistent with what we all know already, which is that the country has been very resilient,” said Kathy Lien, managing director of FX strategy for BK Asset Management.
Lien said bank holidays in Australia and some European countries kept volatility low, while scheduled speakers from the Federal Reserve, including James Bullard, Daniel Tarullo, and Eric Rosengren were likely to reiterate the central bank’s message that it would not tighten monetary policy this year.
Editing by Bernadette Baum