* Majors broadly steady, dollar index flat
* Market focused on any change in Fed's Treasury buying
* Eyes on Treasury yield move on $104 bln auctions next week
By Kaori Kaneko
TOKYO, June 19 (Reuters) - The dollar held on to light gains against most major currencies on Friday after U.S. yields rose following data that fed hopes for the economy.
U.S. data on Thursday showed the number of people on jobless benefits fell for the first time since January, while manufacturing in the U.S. Mid-Atlantic region contracted much less than expected in June.
Given generally benign economic data, U.S. government bonds fell, with the benchmark yield also rising on worries about the market's ability to handle $104 billion in debt to be offered in auctions next week.
Investors are awaiting a meeting of Federal Reserve policy-makers next week to set the tone for currencies, looking for any clues about its debt buyback programme and how it views the outlook for the economy.
The market has struggled for direction this week as investors assess whether a three-month long rally in riskier assets such as shares and higher-yielding currencies has got ahead of itself while the global economy is still struggling through recession.
"With lingering concerns about supply in the U.S., investors are focusing on whether the Fed will increase its Treasury buying," said Tomohiro Nishida, a manager at Chuo Mitsui Trust and Banking.
"A sharp rise in (longer-term) yields in the U.S. on supply concerns amid a huge deficit could weaken the dollar," Nishida said, but added that a rise in shorter-end yields on the back of positive data could help the dollar.
The euro was up 0.1 percent at $1.3918, down from Thursday's high of $1.4002 on trading platform EBS and below its 2009 peak of $1.4339.
The dollar gained on Thursday helped by chart-based trading and news of a change in the definition of the London interbank offered rate which raised speculation that yields on U.S. investments would move higher.
The amendment is expected to be announced and implemented on Friday and analysts said more details were needed to make clear the impact, if any, on the currency market.
The dollar edged up 0.1 percent to 96.65 yen.
Tokyo's Nikkei share average rose 0.3 percent after a gain in U.S. share markets the previous day, while oil steadied above $71.
Dealers said there were dollar buy orders from Japanese importers and other investors such as hedge funds, although price action was limited.
Higher-yielding currencies held steady with the Australian dollar at $0.8002 and the New Zealand dollar at $0.6387.
"The market mood overall is not necessarily bad. With the market consensus that panic trading is over, some have started trading on interest rate differentials," said Mitsuru Sahara, chief manager at Bank of Tokyo-Mitsubishi UFJ.
The Swiss National Bank held interest rates at a record low on Thursday, and SNB governor Jean-Pierre Roth said he would continue to stop an irrational rise in the Swiss franc.
The euro was steady against the Swiss franc at 1.5104 francs after climbing as high as 1.5149 francs on EBS on Thursday. (Editing by Hugh Lawson)