FOREX-Yen softens across the board as importers sell after rise

* Euro seen facing tough resistance around $1.3300

* Bond sales, German data key events this week

* USD/JPY down 0.5%, EUR/JPY drops 0.6%, AUD/JPY falls 0.2%

By Antoni Slodkowski

TOKYO, March 26 (Reuters) - The dollar bounced off a 10-day low against the yen on Monday, scooped up on the dip by Japan importers after it found support on the charts, although doubts lingered about the greenback's strength after a rally in the U.S. bond yields took a breather.

The dollar muscled in on the Japanese currency, pushing it lower against other units such as the euro and the Australian dollar, while commoditycurrencies were broadly steady after a hammering last week on worries of slowing demand for resources.

"Even though the dollar rally on the yen has lost a bit of momentum, the dollar is still strong after it didn't break below 81.97 support twice in the last two weeks," said Teppei Ino, currency strategist at Bank of Tokyo-Mitsubishi UFJ in Tokyo.

"I wouldn't expect Japanese repatriation flows to keep a lid on the dollar ahead of the fiscal year-end. We hear a lot about importers buying the dollar on the dip than offers by exporters," he said.

Ino added that many exporters have already finished their currency hedging, not only for the fiscal year to March 31, but also until the end of the first quarter of the next financial term.

The dollar climbed 0.5 percent to 82.70 yen, inching closer to an 11-month high of 84.19 set on March 15. Strong support is seen at the 38.2 percent retracement of its Feb-March rise at 81.06.

The yen also fell against the euro, shedding 0.7 percent to 109.61 and versus the Australian dollar, losing 0.2 percent to 86.45.

Weak data from China and Europe last week reminded investors of the fragile nature of the economic recovery, stopping the selloff in safe-haven U.S. Treasuries and weighing on the greenback as short-term U.S. bond yields leveled out.

That saw the dollar index, a gauge of its performance against a basket of major currencies, sink to a two-week low last week, before it recovered a little bit of ground on Monday to 79.42.

FACING A BARRAGE

The euro hovered a whisker away from a three-week high against the dollar, last fetching $1.3254, close to Friday's peak of $1.3294.

It failed last week to breach resistance at $1.3302, a level representing a 61.8 percent retracement of its late February to mid-March fall.

Investors shied away from chasing last week's rally as the single currency faces a barrage of events this week, including key economic data from Germany, bond auctions in Italy and a meeting of euro zone finance ministers.

Italy is looking to raise up to 7.5 billion euros in debt markets amid renewed pressure on peripheral euro zone debt sparked by fears of fiscal slippage.

"Any sign of erosion in restored confidence for these bonds is likely to weigh on the euro," Barclays Capital analysts wrote in a client note.

"We continue to expect EUR/USD to fall gradually to $1.20 in 12 months on the back of easier monetary conditions in the euro area and as the risk-premium will likely remain elevated."

The Aussie which suffered a steep fall last week, at one point popped up to $1.0493, from $1.0475 late in New York on Friday, with traders noting good buying interest from a Swiss bank. It was last down 0.1 percent at $1.0450.

"In the short-term, and given the latest AUD skid was driven by slightly selective reading of comments from a BHP mining executive and contracting China manufacturing activity, we think over-extended (long) market positioning has exaggerated the decline in the AUD," said Gavin Friend, National Australia Bank market strategist.

"For the coming week we look for a 1.0220-1.0550 range."

Germany is to release Ifo business sentiment data later in the day, while Federal Reserve Chairman Ben Bernanke could steal the limelight with a speech at 1200 GMT as some are still looking for signs of further quantitative easing.