* Yen recovers after hitting lows vs euro, commodity currencies * Yen still seen as the funding currency for carry trades * Dollar steady after rally, NY Fed Dudley's speech eyed By Anirban Nag LONDON, March 19 (Reuters) - The yen climbed off a five-month low against the euro on Monday, and picked up versus growth-linked currencies, earning a brief respite from investors seeking to fund purchases in riskier assets by borrowing in the Japanese currency. The yen's status as the currency of choice for carry trades, where investors borrow a low-yielding currency to buy higher-yielding assets, is likely to continue after the Bank of Japan's surprise easing last month. Additionally, a recent surge in U.S. Treasury yields has made the dollar less appealing as a funding currency compared to the yen. After hitting fresh lows against the euro and hovering near 11-month troughs against the dollar, the Japanese currency has bounced, but is likely to stay under pressure with most investors looking at any rebound to initiate fresh bearish positions in the yen, analysts said. The euro rose as high as 110.15 yen at one point on trading platform EBS, its highest level since late October. It later pared those gains and was last changing hands at 109.30 yen , down 0.6 percent on the day. The higher-yielding Australian dollar rose to 88.63 yen , its highest level since May 2011. The growth-linked Australian dollar last stood at 87.95 yen, down 0.4 percent on the day. "There has been a significant rise in short yen positions so we are seeing a bit of a pullback ahead of a holiday in Japan," said Jeremy Stretch, head of currency strategy at CIBC World Markets. Japanese markets will be shut for a holiday on Tuesday. "These are opportunities to initiate fresh bearish positions and we expect dollar/yen to rise towards 85-85.50 yen while the euro having hit a high above 110 yen, is likely to consolidate." Net shorts in the yen have risen significantly over the past three weeks. With Greek-related risks in the euro zone taking a breather, the euro was supported against the yen, while the Federal Reserve's not so dovish outlook was giving U.S dollar bulls a boost. That view could be challenged at a speech by New York Fed President William Dudley later in the day. Dudley is an arch dove and could reiterate the Fed's position that unless the U.S. jobless rate drops further, the chance of further stimulus could not be ruled out. But given a sharp drop in recent days, the Japanese currency may be due for some respite, traders said. Also, March is typically a month that attracts Japanese corporate demand for yen ahead of Japan's business year-end at the end of the month. DOLLAR CONSOLIDATES The dollar was little changed against a basket of currencies at 79.856 while the euro was slightly lower against the greenback, trading at $1.3150. Despite some easing in euro zone tension, speculators are still running bearish positions in the euro, although they have trimmed some of those bets. The dollar last stood at 83.12 yen, down 0.3 percent on the day and retreating from an 11-month high of 84.187 yen hit on Thursday. Ray Farris, chief strategist for Asia fixed income for Credit Suisse in Singapore said whether the dollar rises further against the yen in coming months will depend on the Bank of Japan's monetary policy to a large extent. "If the BOJ continues to, month after month, push with new monetary easing measures and does enough to convince the domestic market in Japan that it is serious and credible in trying to raise the inflation rate to about 1 percent, then dollar/yen can probably continue to rise," Farris said. "But it's still unclear just how aggressive the BOJ is willing to be," he said.