FOREX-Dollar near 1-mth lows on yen on easing hopes.

* Dollar under pressure ahead of Bernanke testimony
* Hopes for more easing rise after weak US retail sales
* Euro near 6-wk lows versus yen
By Antoni Slodkowski
TOKYO, July 17 (Reuters) - The dollar was stuck near one-month lows against the yen on Tuesday as Tokyo markets reopened after a holiday, with lukewarm U.S. retail sales for June having bolstered hopes of further U.S. policy easing.
Traders are focusing their attention on the world's largest economy ahead of the Federal Reserve's Chairman Ben Bernanke testimony before Congress on Tuesday and Wednesday.
"The sell-off in the U.S. dollar and U.S. equities tell us that investors are positioning for slightly more dovish comments from Bernanke," said Kathy Lien, Managing Director of FX Strategy for BK Asset Management.
"However, outside of overtly signaling the possibility of more stimulus there's not much Bernanke can say or do that he hasn't already," said Lien.
The dollar stood at 78.82 yen, barely changed from late New York levels. Its support now rests at a June 15 low of 78.61 yen, while resistance looms at its 200-day moving average at 79.05.
The Fed last month expanded efforts to keep long-term interest rates low by announcing it would buy an additional $267 billion in long-term bonds while selling short-term securities in a measure known as Operation Twist.
The central bank, however, held off from launching a third round of outright bond purchases that would expand its balance sheet, a form of stimulus known as quantitative easing.
The yen has also firmed against other currencies, including the euro. The common currency, weakened by the euro zone debt woes was near a six-week low on the Japanese unit, last fetching 96.65 yen.
Analysts said that the euro has become the funding currency of choice after both German and Dutch two-year bond yields turned negative recently.
The strength of Germany's economy has made its highly-liquid bonds a major safe haven from the euro zone's sovereign debt crisis and Dutch bonds have also enjoyed similar demand.
With the dollar on the defensive, the common currency reversed some of its losses sustained versus the dollar after weak U.S. retail sales, but Lien cautioned it was not the start of a strong uptrend.
"The rally in the euro had nothing to do with the outlook for the euro zone because the EUR/USD was trading in negative territory before the U.S. retail sales report," she said.
The euro was last at $1.2268. It earlier fell as low as $1.2175, not far from a two-year low hit last week.
Germany's Constitutional Court said on Monday it would not rule until Sept. 12 on whether the euro zone's bailout fund -- the European Stability Mechanism -- and planned changes to the region's budget rules are compatible with German law.
A report suggesting a change in the European Central Bank's stance on how some bondholders could be treated under Spain's bank bailout has put pressure on the single currency.