* Gains in oil, stocks help lift risk appetite
* Japan mutual funds buy foreign currencies, denting yen
* Euro gains just 1 pct vs dlr but 7 pct vs yen in H1
By Rika Otsuka
TOKYO, June 30 (Reuters) - The dollar and the yen slipped on Tuesday as higher oil, gains in share prices and better-than-expected sentiment in the euro zone boosted hopes of a global recovery, helping investor risk appetite.
Currencies of commodity producers such as the Australian dollar rose as oil prices surged above $73 per barrel to hover near an eight-month high.
Foreign currency buying linked to recent launches of new Japanese mutual funds pushed down the yen across the board in early Asian trade, though it later trimmed losses as some locked in profits from a rally in other currencies the previous day.
"Optimism over the global economy is coming back," said Hideki Hayashi, global economist at Mizuho Securities.
"Hopes for recovery encourage investors to buy cross/yen," Hayashi said. "More stable financial markets prompt investors to shift funds to the euro, sterling and the Aussie from the dollar."
The dollar index, which measures the dollar against a basket of six currencies, fell 0.2 percent to 79.694.
The euro gained 0.2 percent to $1.4107, extending gains made the previous day when a survey by the European Commission showed economic sentiment in the euro zone improved more than expected in June.
But the European single currency has only gained about 1 percent against the greenback in the first half year of this year, after losing ground sharply in the first quarter.
Sterling rose 0.4 percent to $1.6637 after climbing as high as $1.6662 after the GfK/NOP consumer confidence survey showed on Tuesday that British consumer morale improved to its best in 14 months.
Sterling has jumped nearly 14 percent against the dollar so far this year as investors have bought back risky assets that they dumped in panic during the height of the financial crisis.
The Australian dollar advanced 0.4 percent to $0.8112 and was also poised to end the half year up more than 14 percent.
The dollar edged down 0.1 percent to 95.93 after rising as high as 96.33 yen on trading platform EBS.
"The dollar is not expected to fall sharply against the yen today, likely underpinned by window-dressing buying by Japanese institutional investors who want to lift the value of their dollar assets at the end of the first half of the year," said Tsutomu Soma, senior manager in the foreign securities department at Okasan Securities.
The euro rose close to 136 yen in early Asian trade on Japanese mutual fund buying, then eased to 135.20, little changed from late U.S. trade on Monday. It has gained about 7 percent against the yen in the half year.
But in a sign that investor confidence is still not consistent, Japanese mutual funds investing in domestic and overseas assets launched on Tuesday totalled just 4.57 billion yen ($47.6 million), according to data compiled by Reuters, less than had been expected.
However the Australian and New Zealand dollars stayed buoyant against the yen as the market in uridashi bonds, or foreign bonds sold to Japanese retail investors, picked up.
A total of A$838 million in uridashi bonds were issued in June, up from A$322 million in May, while NZ$519 million in uridashi bonds were issued, jumping from NZ$72 million in May, according to Reuters data.
Tokyo's Nikkei share average was up 1.9 percent by midday amid growing optimism that the economic recession may be easing.
Activity was subdued, with many investors reluctant to move ahead of important economic events such as the Bank of Japan's quarterly tankan survey on Wednesday, a European Central Bank policy meeting and the U.S. government's monthly employment report. (Editing by Joseph Radford)