FOREX-Dollar nurses losses against yen after BOJ holds policy steady

* BOJ holds monetary policy steady, deflates easing hopes

* Dollar, euro fall almost 3 pct vs yen

* Dollar pares losses vs yen after U.S (Other OTC: UBGXF - news) . data

* Kiwi jumps after RBNZ also skips chance to cut rates (Updates prices, adds comments; changes byline, dateline, pvs LONDON)

By Sam Forgione

NEW YORK, April 28 (Reuters) - The U.S. dollar pared losses against the yen on Thursday, but was still on track to notch its biggest daily loss against the Japanese currency in eight months, after U.S. consumer spending data provided some optimism on the U.S. economic outlook.

The dollar was last down 2.6 percent against the yen at 108.54 yen after the Bank of Japan's surprise decision not to further ease monetary policy. The greenback's last level against the yen was up from its earlier 10-day low of 107.93 yen.

The euro was last down 2.6 percent against the yen at 122.98 yen, also after hitting a 10-day low of 122.56 yen.

Analysts said U.S. data showing consumer spending increased at a 1.9 percent rate in the first quarter was better than some market participants were expecting and helped the dollar pare losses against the yen.

"The numbers we got today were probably a bit better than expected," said Brian Daingerfield, currency strategist for RBS (LSE: RBS.L - news) Securities in Stamford, Connecticut, in reference to the consumer spending data.

Consumer spending was the slowest since the first quarter of 2015 and marked a deceleration from the fourth quarter's 2.4 percent rate. The figure was still better than the 1.7 percent rate some were expecting, Daingerfield said.

In addition to the BOJ's decision to hold steady in the face of soft global demand and a sharp rise in the yen, the dollar was also hit by the Federal Reserve's decision on Wednesday not to give a strong sign of another rise in rates in June.

"The fact that the Fed was dovish and the BOJ did not deliver was certainly the hard combination that drove dollar/yen lower," said Sebastien Galy, currency strategist at Deutsche Bank in New York.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last down 0.38 percent at 94.027. The euro was last mostly flat against the dollar at $1.1321, down from a one-week high of $1.1368 touched earlier .

New Zealand's central bank also skipped a chance to cut its interest rates on Thursday, triggering a short squeeze that saw the kiwi dollar soar 2.2 percent to $0.6966.

On Wall Street, the benchmark S&P 500 stock index was last up 0.05 percent. (Reporting by Sam Forgione; Additional reporting by Patrick Graham in London; Editing by Tom Brown)