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FOREX-No respite for Japan as yen soars to 18-month high

* Yen hits 18-month high vs dollar

* Dollar index down 0.4 pct, euro trades above $1.15

* Australian dollar down 1.8 percent against yen (Recasts, adds quotes, details)

By Anirban Nag

LONDON, May 3 (Reuters) - The yen jumped to a 18-month high against a weak dollar on Tuesday, extending gains that have undermined Japanese officials' attempts to reflate the developed world's most stagnant economy.

The yen also rose sharply against the Australian dollar, up 1.7 percent after the Reserve Bank of Australia cut interest rates to record lows.

The yen has now risen over 12 percent against the dollar this year, extending gains after the Bank of Japan kept monetary stimulus unchanged last week.

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Further gains are likely to fan talk of further easing by the BOJ sooner rather than later, traders said, as Japanese politicians also signalled concerns about the currency's run-up.

Media reports said Japanese Prime Minister Shinzo Abe and French President Francois Hollande had described sudden moves in foreign exchange rates as undesirable.

Abe will also visit Italy and Germany in a European tour some believe he will try to use to set the stage for possible intervention in currency markets as Japan prepares to host a G7 meeting later this month.

Attendees at previous G7 meetings have frowned upon interventions, and Tokyo is sensitive to criticism that it is trying to engineer a weaker yen through ultra-loose monetary policy.

But traders said a sharp rise towards 100 yen per dollar could prompt action, even during Japan's Golden Week holidays.

The dollar has been on the defensive with the U.S (Other OTC: UBGXF - news) . Federal Reserve seen in no hurry to raise rates. On Tuesday, the dollar index fell as far as 91.919, its lowest since January 2015.

"Broad-based dollar weakness is reinforcing the problem of a stronger yen for Japanese policymakers," said Lee Hardman, currency strategist at Bank of Tokyo Mitsubishi.

The greenback fell to 105.50 yen on Tuesday, its lowest since October 2014, as worries over subdued inflation and tardy global growth returned and pushed investors to the safety of low-yielding, liquid currencies.

The euro, another low-yielding currency, rose 0.6 percent against the dollar to $1.1616, its highest since August.

The Reserve Bank of Australia earlier joined other developed nation central banks in easing policy, cutting by 25 basis points to 1.75 percent amid falling inflation. The market had been split on whether the RBA would ease policy, meaning many investors sold the Australian dollar when it did.

The Aussie tumbled 1.8 percent against the yen and 1.4 percent against the dollar to $0.7556.

"At least the Australian central bank will be happy with the reaction in the currency. For the Bank of Japan and the European Central Bank, the rise in the yen and the euro is definitely not welcome," said Niels Christensen, FX strategist at Nordea.

Last week, the yen produced its biggest weekly gain since 2008 - more than 5 percent against the dollar - as the BOJ held off from expanding its stimulus.

The U.S. Treasury Department called current dollar-yen conditions "orderly" -- widely interpreted as a signal to Japanese officials not to intervene to weaken the yen. (Additional reporting by Masayuki Kitano; editing by John Stonestreet)