* Dollar rises broadly in choppy trade
* Rise in U.S. yields spurs dollar buyback
* Worries over Ireland persist, eyes on eurogroup meeting
* Dollar/yen hits 5-week high, meets Japan exporters offers
By Hideyuki Sano
TOKYO, Nov 15 (Reuters) - The dollar rose in choppy trade marred by thin liquidity on Monday, hitting a five-week high against the Japanese yen, as U.S. bond yields soared.
The Wall Street Journal reported that a group of prominent Republican-leaning economists, working with Republican lawmakers and political strategists, is launching a campaign calling on Federal Reserve Chairman Ben Bernanke to drop his plan to buy $600 billion of U.S. Treasuries.
The report helped push up U.S. bond yields sharply, with the 10-year yield hitting a two-month high and the five-year yield rising more than 10 basis points.
That in turn prompted further short-covering in the dollar, which had been sold aggressively as investors bet the Fed would print hundreds of billions of dollars to shore up the economy.
"There's speculation that the Fed may have to scale back its asset purchase," said a trader at a Japanese bank.
The euro slipped 0.1 percent to $1.3676, giving up earlier gains to as high as $1.3751 made on hopes of an EU aid package for Ireland.
It fell to a six-week low of $1.3573 on Friday before recovering on talk of EU aid for the country.
Ireland did not rule out the possibility that it may have to turn to Europe for help in dealing with its debt crisis but said that no application had been made for assistance yet. Euro zone finance ministers meet in Brussels on Tuesday.
Still, the market is also watching other euro zone economies and is nervous about a prospective tightening in China.
"Sentiment remains fragile as European bond concerns taken together with worries about monetary tightening in China have resulted in risk appetite declining," wrote Mitul Kotecha, global head of FX strategy at Credit Agricole CIB in Hong Kong.
"If Ireland does not accept EU funding this week the euro could see itself quickly in trouble again and the currency is likely to be sold on rallies up to $1.3826 in the short term."
Trade has been choppy because of thin liquidity in markets, traders also said.
"There are not many orders on both sides. Market liquidity is thinner than usual and prices could move easily if there is a big order," said Katsunori Kitakura, chief dealer at Chuo Mitsui Banking Corp.
On the charts, the euro had major resistance at $1.3825/35, intraday highs in the middle of last week, and one dealer said if it could push above $1.38 then there might be scope for a rise back to $1.40, but it was likely to be capped there.
On the downside, it has support at its 55-day moving average at $1.3552 and needs a weekly close above its 100-week moving average, now at $1.3640, not to send a bearish signal.
The dollar gained 0.5 percent to 82.90 yen, hitting a five-week peak of 82.98 and breaking above its 55-day moving average for the first time since early June.
The dollar/yen's advance could continue as traders try to trigger stop-loss buy orders that are said to be lurking at 83.00 and 83.20 yen, though selling by Japanese exporters could hamper its rise, traders said.
AUSSIE DROP
The Australian dollar dropped to a two-week low of $0.9812, having lost more than 3 percent in the past week as traders take profits in the Aussie.
Investor appetite for risk took a hit on Friday on speculation China would have to tighten policy further to curb inflation. If that happens, it could ultimately cool the economy and China's demand for commodities.
Analysts noted the same fears abounded earlier in the year only for the Chinese economy to surprise with its resilience, but the latest bout of worries served as an excuse to take profits on leveraged positions in commodities.
Gold and oil prices stablised on Monday but the price of zinc and lead fell sharply, which some traders said triggered more selling in the Australian dollar. (Additional reporting by Wayne Cole in Sydney and Charlotte Cooper Masayuki Kitano in Tokyo, and Reuters FX analyst Krishna Kumar in Sydney; Editing by Joseph Radford)