* Dollar/yen steady after moving off low thanks to US yield
* Aussie looks to RBA for cues after 2 days of solid gains
* RBA widely expected to stand pat, focus on its economic
By Shinichi Saoshiro
TOKYO, June 6 The dollar held firm early on
Tuesday after crawling away from an 18-day low against the yen
thanks to a bounce in U.S. yields, while the Australian dollar
was steady ahead of a policy decision by the country's central
bank later in the day.
The U.S. currency was little changed at 110.425 yen
after slipping overnight to 110.250, its lowest since May 18.
The dollar had came under pressure as Friday's
weaker-than-expected U.S. non-farm jobs report prompted
investors to pare back expectations of future interest rate
increases by the Federal Reserve.
U.S. Treasury yields fell sharply in response to the
employment data but pulled higher a little on Monday to give the
dollar some breathing space.
Still, with the benchmark 10-year Treasury yield
not far from a seven-month low plumbed on Friday, the dollar's
recovery was limited.
"The broader decline in Treasury yields amid a less rosy
outlook for the global economy is weighing on the dollar. But on
the other hand, the upbeat equity markets is good for risk
sentiment and this prevents the dollar from falling too much
against the yen," said Shin Kadota, a senior strategist at
Barclays in Tokyo.
"Dollar/yen sees ample support at 110.00 but its range has
also narrowed down due to such factors."
The euro was steady at $1.1255 after slipping about
0.3 percent the previous day to pull away from seven-month high
scaled on the dollar's broader decline.
The common currency's advance also stalled as a wait-and-see
mood prevailed ahead of Thursday's European Central Bank policy
The Australian dollar was little changed at $0.7487
The Aussie had slumped to a three-week low of $0.7322
earlier last week on weak China data and lower
commodity prices before rebounding against a flagging greenback.
The market looked to the Reserve Bank of Australia's policy
decision due later on Tuesday for cues.
The RBA is widely expected to keep interest rates unchanged
at a record low of 1.5 percent and focus was on its stance on
the domestic economy in the wake the recent drop in iron ore
prices, a relatively high unemployment rate and sluggish wage
Sterling treaded water at $1.2097 after rising
overnight to a 10-day high of $1.2940 after an opinion poll gave
Britain's ruling Conservative Party a comfortable lead ahead of
Thursday's parliamentary elections.
(Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)