By Rika Otsuka

TOKYO, Aug 12 (Reuters) - The dollar steadied on Thursday
after scoring its biggest daily gain for nearly two years against
most major currencies the previous day as concerns about the U.S.
and global economies triggered a wave of unwinding in short
dollar positions.

But the greenback was on the backfoot against the yen,
hovering near a 15-year trough of 84.72 yen hit on trading
platform EBS on Wednesday, when it took out option barriers
around 85.00 yen and a November low of 84.82 yen.

The dollar's fall against the yen was fuelled by a narrowing
spread between U.S. and Japanese government bond yields.

Two-year Treasury yields fell to a fresh all-time low on
Wednesday a day after the Federal Reserve announced a plan to
reinvest the money from maturing mortgage bonds in government
debt to help its economy.

The yen also extended gains in its broad-based rally as
investors cut back positions in risky assets, such as
higher-yielding currencies, stocks and commodities.

"There is little feeling of overheating in the market,
suggesting the dollar and the yen have room for further rises,"
said Tsutomu Soma, senior manager of the foreign securities
department at Okasan Securities.

"Investors have no choice but to shun risk after ... they
realised the global economy is not as rosy as they had previously
thought."

The dollar index, a gauge of the greenback's performance
against six major currencies, was little changed on the day at
82.268, but well above its 200-day moving average, now at 80.898.

On Wednesday, the dollar index soared 2 percent for its
biggest one day rise since October 2008.

The dollar index might have finally reversed its trend after
steadily sliding in the past two months, traders said.

It now has immediate support around the 81.53-81.60 region. A
rise beyond a July 21 high of 83.45 would confirm it has bottomed
out.

INTERVENTION JITTERS

Against the yen, the dollar slipped 0.3 percent from late
U.S. trade to 85.04 yen. Traders said the dollar may find some
support at the psychologically key 84.00 yen level and 83.50 yen,
around its July 1995 low.

The yen's strength, especially against the dollar, has
stirred worries that Japanese authorities could intervene to rein
in gains in the Japanese currency.

A stronger yen is raising alarm among policymakers worried
that it could undermine exporters that have led the economy out
of the global downturn.

Increasing jitters over possible intervention are prompting
speculators to book profits on the yen's rally, rather than
holding onto yen longs for an extended period, although many
still believe a leap of 3-yen in a day against the dollar could
prompt Japanese authorities to intervene, traders said.

"Dollar bids that seem to be linked to short-covering in
speculators' short dollar positions keep coming, helping the
market absorb dollar offers," said Mitsuru Sahara, chief manager
of FX derivatives trading at Bank of Tokyo-Mitsubishi UFJ.

A euro zone official told Reuters on Wednesday that European
authorities would not welcome intervention by Japan and joint
intervention by major central banks is not on the cards.

The euro inched up 0.1 percent to $1.2880, while it dipped
0.2 percent to 109.55 yen after hitting a one-month low of 109.24
yen.

Japan could intervene in the currency market to weaken the
yen if market moves become disorderly, Kazuyuki Sugimoto, who was
Japan's vice finance minister until July 2009, told Reuters on
Thursday.
(Additional contribution by Reuters analyst Krishna Kumar in
Sydney; Editing by Joseph Radford)