* Dollar rises modestly versus yen, down vs euro
* China rules out "sudden" changes in FX reserve policy
* Thursday's U.S. payrolls data awaited
(Adds comments, details. Changes byline and dateline, previous LONDON)
By Vivianne Rodrigues
NEW YORK, June 29 (Reuters) - The dollar was higher versus the yen on Monday, rising on Chinese officials' comments ruling out sudden changes in their foreign exchange reserve policy, and as investors shied away from taking large positions before key U.S. jobs data due this week.
China said at a meeting of central bankers in Basel at the weekend that the policy governing its currency reserves, which comprise mainly U.S. Treasuries, was stable and consistent with no "sudden changes", giving the dollar some respite. For details, see [ID:nDEG003567]
The dollar had come under pressure last week as debate intensified about the use of an alternative global currency to the greenback, with China's central bank renewing its call last week for a super-sovereign reserve currency.
"The news helped to boost the dollar at the start of trade this week... as traders breathed a sigh of relief regarding the greenback's ongoing status as a reserve currency," said Boris Schlossberg, director of currency research at GFT Forex in New York.
"On Friday the buck came under pressure after China hinted at a need for new architecture in the foreign exchange market," he added. But "today's tacit reaffirmation of the dollar standard is a sign of Chinese acknowledgment that for the time being the greenback remains the primary manner for settling global trade accounts."
In morning trading in New York, the dollar was up 0.2 percent at 95.40 yen
Analysts said currency movements would remain subdued ahead of U.S. payrolls data, and comments by the European Central Bank and Sweden's Riksbank expected later this week after their monetary policy meetings.
"There is some position squaring ... Normally the week before payrolls numbers investors tend to be defensively positioned and right now being defensive means to be long dollar," said Geoffrey Yu, foreign exchange strategist at UBS AG in London.
US PAYROLLS
The market will pay close attention to U.S. payrolls figures, due on Thursday, for any signs of improvement in the economy's health. According to a Reuters poll, forecasts are or a loss of 363,000 jobs in June compared to a decrease of 345,000 in May.
The euro
The European currency gained some support after data showed euro zone economic sentiment improved more than expected in June. A survey by the European Commission showed economic sentiment in 16 countries using the euro rose to 73.3 points in June from 70.2 points in May [ID:nLT643111].
The dollar has suffered broadly in the first half of 2009 as recovering stock prices has stoked demand for risk -- chipping away at the U.S. currency's safe-haven appeal -- while concerns about the U.S. fiscal position has also weighed on the currency.
The dollar has struggled the most against higher-risk currencies including sterling and the Australian and New Zealand dollars, which have each gained more than 10 percent this year.
Some analysts said that market focus may turn away from risk issues in the second half, while economic fundamentals may take up more of the spotlight, which could reward currencies whose economy are seen improving in the mid-term.
(Additional reporting by Harpreet Bhal in London; Editing by Chizu Nomiyama)