* Dollar edges up vs yen, off previous day's lows vs euro
* Dollar fell Wednesday on Geithner comments on SDR
* Geithner said dollar to remain world's reserve currency
* Yen slips against higher-yielding currencies
By Masayuki Kitano
TOKYO, March 26 (Reuters) - The dollar rose against the yen on Thursday, rebounding from lows hit after U.S. Treasury Secretary Timothy Geithner said he was open to expanding the use of the International Monetary Fund's special drawing rights.
Investors initially interpreted Geithner's remarks on Wednesday as an endorsement of China's proposal this week to eventually replace the dollar as the world's reserve currency with the IMF's SDRs.
Geithner's comments pushed the dollar lower against the euro and the yen on Wednesday, although it regained ground after he said the dollar would keep its status as the top reserve currency for a long time.
Geithner was probably commenting on China's call for expanding use of the IMF's SDRs rather than about the notion that the SDR may eventually replace the dollar as the world's reserve currency, said Masafumi Yamamoto, head of foreign exchange strategy Japan at Royal Bank of Scotland.
"The remarks probably were not made from the standpoint of foreign exchange policy," Yamamoto said, adding that the Treasury secretary probably did not mean to affect moves in the dollar with his comments.
"It is hard for the United States to seek a stronger dollar, but at the same time, if they call for a weaker dollar that could make it hard for them to finance their (current account) deficit, as investors may shy away from buying Treasuries," Yamamoto said, adding that a higher dollar would hurt the trade competitiveness of U.S. goods.
The dollar rose 0.3 percent from late U.S. trading on Wednesday to 97.80 yen. That was up from Wednesday's low of 96.90 yen and last week's one-month low of 93.55 yen hit on trading platform EBS.
The euro dipped 0.2 percent to $1.3552, having pulled back from Wednesday's high of $1.3653 and last week 2-½ month high of $1.3739.
Against the yen, the euro was steady at 132.53 yen, having pulled back from a five-month high of 134.50 yen hit earlier this week.
Market players said the yen was pressured by selling by a Japanese brokerage. A trader for a European bank said the reasons behind the flows were unclear, although they might be related to overseas investment by Japanese investors.
With the end of Japan's fiscal year coming up next week, this is a time when special seasonal flows can appear, he added.
The yen has slid against high-yielding currencies in the past few weeks as gains in global stock markets have pointed to an improvement in investors' risk appetite.
Underscoring such sentiment, Asian shares were broadly higher. The rise in regional shares came after U.S. stocks rose on Wednesday as unexpectedly strong housing and durable goods data fuelled hopes the economy is finally on the mend.
The New Zealand dollar rose 0.8 percent to 55.66 yen and the Australian dollar was 0.4 percent higher at 68.38 yen. The Australian dollar hit a 4-½ month high of 69.60 yen earlier this week.
The New Zealand dollar gained some support after the country's fourth-quarter current account deficit was in line with market expectations, allaying fears of a large blowout of the deficit that could hurt New Zealand's currency and credit rating.
Earlier, the Reserve Bank of New Zealand denied a market rumour that an emergency meeting was being held to discuss a spike in five-year yields, which have climbed around 80 basis points in the past two days. (Editing by Kazunori Takada)