* Dollar turns lower, hit by Japanese exporter selling
* General Motors to file for bankruptcy
* Dollar at multi-month lows on index vs higher yielders
By Charlotte Cooper
TOKYO, June 1 (Reuters) - The dollar lost its footing on Monday and headed back to multi-month lows against commodity-related currencies, the euro and sterling as investor appetite for higher-yielding assets continued to recover.
The U.S. currency took in its stride news that General Motors Corp would file for Chapter 11 bankruptcy protection later on Monday, a move long expected.
The dollar hit a fresh five-month low against a basket of currencies and the euro hovered near a 5-month high after hopes for a global recovery got a boost on Friday from data showing the U.S. economy shrank less than expected in the first quarter.
Concern about the expanding amount of Treasury debt needed to fund a record U.S. budget deficit has also been putting pressure on the dollar just as signs that the economy may be through the worst have encouraged investors into riskier assets.
"The tone has not changed -- risk positive and dollar weakness," said Masafumi Yamamoto, head of FX strategy Japan at Royal Bank of Scotland in Tokyo.
"It seems that dollar-based hedge funds or U.S. investors are finally using the cash piled up during the risk aversion period."
In China, Treasury Secretary Timothy Geithner pledged the U.S. administration was committed to cutting its huge deficits as quickly as it could.
The dollar fell 0.2 percent to 95.20 yen, edging back towards May's two-month low of 93.85. Two traders said Japanese exporters had been selling dollars and one said foreign funds were also selling.
The greenback dipped to a five-month low of $1.4170 per euro on trading platform EBS before edging into positive territory on the day at $1.4125.
"The underlying market trend is dollar selling, and investors are shifting funds to risk assets such as stocks," said Akira Takeuchi, a manager at Chuo Mitsui Trust and Banking.
"That said, there is also a risk that the recent optimism may wane if stocks fall on subsequent developments and the impact from an expected GM filing for bankruptcy protection. And this could prompt investors to buy back the dollar," he said.
Asian share markets were broadly higher, with S&P futures up 1 percent, indicating a firm start on Wall Street.
Analysts say the impact of GM's bankruptcy filing could be felt more in the currency markets at a later date, when U.S. employment figures are released.
The euro and sterling both gained 1.5 percent against the dollar on Friday while the Australian and New Zealand dollars both charged more than 2 percent higher.
The Australian dollar, which hit a fresh eight-month peak of $0.8075 according to Reuters data, rose 0.5 percent to $0.8047 on Monday and the kiwi gained 0.5 percent to $0.6435 after hitting an eight-month peak of $0.6439.
Firm Australian retail sales for April gave the Aussie support and reinforced expectations that the central bank will hold interest rates steady at a record low of 3.0 percent at a policy meeting on Tuesday.
Markets are looking to China to help regenerate economic activity, with Australia particularly expected to benefit.
China's manufacturing sector expanded moderately in May as new export orders improved.
Sterling too touched its highest against the dollar since early November, climbing to $1.6245.
The euro was down 0.2 percent at 134.65 yen, recovering from the day's low of 133.89 yen after the Nikkei share average rose.
The Australian dollar rose 0.2 percent to 76.61 yen. (Additional reporting by Kaori Kaneko; Editing by Michael Watson)