* Dollar slips vs basket of currencies; yen crosses rise
* Aussie gains as local media see chance of Tuesday rate hike
* Payrolls reinforce low US rates; G7 sticks with FX formula
By Charlotte Cooper
TOKYO, Oct 5 (Reuters) - The dollar fell on Monday, losing ground after a G7 ministers meeting at the weekend brought no surprises, while the Australian dollar gained as speculation mounted that the country's central bank could raise rates this week.
The Australian dollar led the yen crosses higher, bounding up more than 1 percent after two influential Australian columnists wrote that a rate move to 3.25 percent from a record low of 3.0 percent was likely at Tuesday's meeting.
"The Aussie dollar is getting bought against everything in a very illiquid market," said a trader at a European bank in Tokyo.
Parts of Australia are closed for a holiday on Monday.
One trader said big Japanese banks had been seen buying yen crosses but selling by hedge funds had appeared to cap the gains.
The euro climbed to 131.48 yen, from around 130.90 yen late on Friday, and the Australian dollar rebounded more than 1 percent from late New York trade to 78.48 yen.
Australian markets had been pricing in only a low probability of a rate increase this week, with many expecting the central bank would be more likely to raise the cash rate from 3.0 percent in November.
But the two Australian media columnists said a move to 3.25 percent was now likely at Tuesday's meeting.
"We don't see the urgency for a move and still think they'll wait, but it sounds like it could be a close call," said Annette Beacher, a senior strategist at TD Securities in Singapore.
The Australian dollar, which fell sharply on Friday, recovered much of its losses to trade at $0.8736 on Monday, although it was still below a high of nearly 14 months at $0.8860 set last week.
The trader for the European bank said on the charts it had resistance at $0.8760/80 and then last week's peak.
The dollar index, a measure of the greenback's performance against six major currencies, fell 0.3 percent, while the euro climbed to $1.4634 after ending around $1.4575 on Friday.
The Group of Seven finance ministers and central bankers, who met in Istanbul at the weekend, broke no new ground on currencies, urging China to strengthen the yuan to help correct global imbalances and saying too much forex volatility tended to threaten economic stability.
Analysts said the statement potentially left the dollar open to further weakness.
"It was the usual mantra about FX volatility and disorderly movements in exchange rates which we've seen time and time again," said Mitul Kotecha, global head of FX strategy at Calyon in Hong Kong.
Weaker-than-expected U.S. jobs data also reinforced expectations that U.S. interest rates would remain low for a while.
Against the yen, the dollar held steady around 89.85 yen with the market undecided whether to push it back down towards a recent eight-month low of 88.23 yen.
A senior trader at another European bank said the dollar had support at 89.80 for now, with Japanese exporters expected to be ready to sell dollars at 90.00-50.
"The market is quite neutral," said another senior trader at a Japanese bank in Tokyo.
"Although the main scenario of dollar/yen is to the down side, people don't have a reason to actually buy yen - there's not a specific story or strategy which will work for yen longs."
Eyes have been on Japan's new government to see if it would react to the yen's recent climb.
Speaking at the G7 meeting, Finance Minister Hirohisa Fujii said Japan would take action if currency moves became excessively one-sided but declined to say if recent moves fell into that bracket.
The Japanese bank trader said he did not expect yen-selling intervention unless the dollar fell to 80 yen or below. Japan has not intervened to sell yen since 2004 and analysts and traders say any such action this time, if it were to happen, would also depend on the speed of yen appreciation. (Editing by Chris Gallagher) (Additional reporting by Wayne Cole in Sydney and Kaori Kaneko in tokyo)