* Aussie jumps vs dollar, yen on RBA Stevens' upbeat view
* Other cross/yen pairs trim losses helped by gains in Aussie
* Market awaits 2-yr U.S. Treasury note auction on Tuesday
* Investors keeping an eye on U.S.-China dialogue
* Market awaits S&P Case-Shiller Home Price Index
By Kaori Kaneko
TOKYO, July 28 (Reuters) - The euro held firm against the dollar on Tuesday after hitting its highest in eight weeks the previous day, when a jump in U.S. new-home sales encouraged investors to seek riskier assets.
The Australian dollar jumped after Reserve Bank of Australia (RBA) Governor Glenn Stevens said the economy had fared well enough that upside risks to the outlook now balanced out those on the downside, adding there was a danger that low interest rates could inflate home prices.
Seeking to gauge investor risk appetite, the currency market was keeping an eye on Tokyo's Nikkei share average after it gained for a ninth straight day on Monday, dealers said. They said a dip in the Nikkei and U.S. stock futures in Asian trade prompted investors to take profits in cross/yen currency pairs but gains in the Aussie helped others to trim losses against the yen.
Figures on Monday showing that U.S. home sales surged in June were taken as a sign the U.S. housing market may have hit bottom.
"The general market tone for a softer dollar and yen remain unchanged amid a solid performance for stocks. Investors are opting for riskier assets," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking.
Dealers also said currency market players were wary that share price gains may have gone too far.
"A slip in stocks and oil prices tends to prompt investors to correct their positions," said Minoru Shioiri, forex trading chief manager at Mitsubishi UFJ Securities.
Investors were also bracing for Tuesday's $42 billion sale of two-year Treasury notes, part of this week's record $115 billion worth of debt auctions.
"Treasury auctions are under way and investors are continuing to watch what is being discussed between the U.S. and China, so it will probably be hard to build large positions," said Yuji Saito, head of the forex sales department at Societe Generale.
U.S. officials reassured their counterparts from China on Monday that the United States would return to a more sustainable fiscal situation and the two sides grappled over currency policies in high-level talks, senior Obama administration officials said.
The euro edged up 0.1 percent to $1.4243 after touching $1.4299 on trading platform EBS on Monday, its highest since early June.
Talk of a euro/dollar option barrier at $1.4300 has been hindering the euro from rising above that level after approaching it three times in the past week, dealers said.
Against the yen, the euro slipped 0.1 percent to 135.46 yen after hitting a three-week high of 136.11 yen on EBS the previous day.
The dollar edged down 0.1 percent to 95.10 yen but was still not far from a three-week peak of 95.39 yen.
The Australian dollar rose 0.2 percent to $0.8249 shedding earlier losses after the RBA governor's remarks, and was just below an eight-week high of $0.8260 brushed on Monday.
The Aussie edged up 0.1 percent to 78.43 yen.
The New Zealand dollar was also holding firm at $0.6567 and was not far from a nine-month peak of $0.6632 hit last week.
Figures released on Tuesday showed that falling exports and imports of large aircraft led New Zealand to unexpectedly post a trade deficit in June after four consecutive month of surpluses.
Investors are looking ahead to the Standard & Poor's Case/Shiller Home Price Index for May later on Tuesday. Economists in a Reuters survey expect a decrease of 0.5 percent after a 0.6 percent fall in the April index. (Additional reporting by Charlotte Cooper; Editing by Michael Watson)