* Dollar fails to rise despite jump in U.S. Treasury yields
* Yen stronger on Japanese exporters’ buying
By Daniel Leussink
TOKYO, July 24 (Reuters) - The dollar weakened slightly in early trade on Tuesday, as Japanese exporters bought the yen, offsetting earlier greenback gains made after U.S. Treasury yields rose on expectations the Federal Reserve would persist with its rate hikes this year.
The dollar index, a measure of the currency against a basket of six rivals, traded a flinch lower at 94.618 on Tuesday compared to the previous day. It was firmly off a one-year high of 95.652 touched on Friday.
A jump in benchmark 10-year U.S. Treasury yields to a five-week high had provided support to the dollar in U.S. trade on Monday. The surge in yields came despite criticism from President Donald Trump about the impact of the strength of the greenback and Federal Reserve interest rate rises on the economy.
“The U.S. economy is in a very healthy state overall. It is unimaginable the Federal Reserve would stop raising interest rates,” said Mitsuo Imaizumi, chief currency strategist at Daiwa Securities.
CNBC had reported on Friday that Trump was concerned that the U.S. central bank would raise interest rates two more times this year.
Trump had earlier questioned the Fed’s expected pace of hikes in posts on Twitter, saying it takes away from the United States’ “big competitive edge” and could hurt the U.S. economy.
Market participants said the yen firmed against the dollar and the euro as Japanese exporters converted their foreign earnings into the local currency. Small exporting firms typically buy yen as the end of month approaches.
“Towards the end of the month, Japanese exporters will line up dollar sales orders. Selling will increase if the dollar gains to a level around 112 yen,” said Imaizumi.
The yen was also higher following a Reuters report that the Bank of Japan was debating moves to scale back its massive monetary stimulus, spurring bids for the Japanese currency.
The Japanese currency rose on Tuesday, crawling back to a two-week peak of 110.74 yen per dollar hit on Monday.
The yen was up 0.1 percent, last changing hands at 111.17 yen per dollar. It had weakened to 111.515 per dollar before giving up those losses.
The offshore yuan touched as low as 6.8448 per dollar, hitting its lowest level since trading at 6.8582 per dollar on June 27, 2017, before recouping some losses. It last traded about half a percent weaker at 6.8388 per dollar.
The euro was flat at $1.1692. (Editing by Sam Holmes)