* Dollar rises against yen after U.S. data
* U.S. manufacturing expanded in August
* Pending home sales at two-year high in July (Updates with reaction to U.S. data, adds quotes, updates prices)
By Wanfeng Zhou
NEW YORK, Sept 1 (Reuters) - The dollar rose versus the yen on Tuesday after a report showing the U.S. manufacturing sector expanded in August for the first time in more than a year and a half boosted risk appetite.
Stocks on Wall Street extended gains while safe-haven demand for the yen fell after the Institute for Supply Management said its index of national factory activity rose to 52.9 in August from 48.9 in July. Readings over 50 indicate expansion.
The median forecast of 78 economists surveyed by Reuters was for a reading of 50.5. For more see [ID:nN01376541].
"Equities are reacting well to U.S. data and so is dollar/yen," said Brian Kim, currency strategist at UBS in Stamford, Connecticut. The data affirms "the view that the U.S. economy is definitely improving."
In mid-morning trading in New York, the dollar traded 0.3
percent higher at 93.25 yen
Separate data showed pending sales of previously owned U.S. homes raced to a two-year high in July, providing more evidence the housing market was on a steady recovery path. See [ID:nN01449976].
Despite a batch of upbeat U.S. economic numbers, major currencies moved in tight ranges as investors continued to debate the outlook for the global economy.
"At the end of the day, the market is still in wait-and-see mode," said Firas Askari, head of currency trading at BMO Capital Markets in Toronto. "We're getting jostled around by every piece of data that comes out and I don't think there's a consensus that this economy has legs." (Additional reporting by Gertrude Chavez-Dreyfuss and Steven C. Johnson; Editing by Andrea Ricci)