* Euro eyes 5-month high of $1.3684
* Dollar index edges lower, eyes latest 8-month low
* Aussie dollar buoyed after China PMI at 53.8
By Charlotte Cooper
TOKYO, Oct 1 (Reuters) - The euro edged up towards a five-month high on the U.S. dollar on Friday and the Australian dollar gained after upbeat Chinese data encouraged a little risk-taking in the higher-yielding currency ahead of U.S. indicators.
The dollar steadied at 83.50 yen, remaining above the previous day's low at 83.16 yen and last month's 15-year trough below 83.00 that had prompted Japanese authorities to intervene for the first time in six years.
Chinese manufacturing gathered momentum last month, with the official purchasing managers' index rising to 53.8 from 51.7 in August, beating forecasts and providing further evidence the economy is pulling smoothly out of a second-quarter swoon.
Traders said the data provided a sharp contrast to the situation in the United States, with the market speculating the Federal Reserve will take more quantitative easing steps even though economic numbers the previous day injected a little caution into that expectation.
"It's a perfect storm for risk and Asian currencies to perform well. The U.S. is struggling with low inflation and high unemployment so there's a lot of focus on QE2 which should drive the dollar down further," said Gerrard Katz, head of FX trading for Hong Kong at Standard Chartered.
"And you have reasonable growth elsewhere ... Asia, as with that China PMI number, is performing strongly."
The euro rose 0.2 percent to $1.3656 after hitting a five-month peak of $1.3684 on Thursday helped by data showing euro zone banks are relying less on funds from the European Central Bank.
The euro has rallied 15 percent against the dollar since hitting a low in June and about 7 percent since the start of September. It has pushed up through its 55- and 100-week moving averages this week but not yet taken out resistance at its April high of $1.3692.
The dollar index eased 0.1 percent to 78.681 after dropping as far as 78.414 on Thursday, its weakest in eight months.
The Australian dollar, which is up 10.5 percent from a low hit in late August, rose 0.3 percent to $0.9689, after hitting a two-year of $0.9734 on Thursday. Higher interest rates and demand for Australia's resources, especially from China, have fuelled its rally.
YEN
Data on Thursday showed new U.S. jobless claims fell last week and regional manufacturing grew faster than expected. Analysts and traders say the market will be watching U.S. indicators closely to gauge whether the Fed will act.
"And it will be key how Treasury yields react to the data releases, as higher yields could provide some respite for the dollar," wrote Brian Kim at UBS in a morning note.
The Institute for Supply Management releases its September manufacturing index at 1400 GMT. Economists in a Reuters survey expect a reading of 54.5 versus 56.3 in August.
Last week a Fed statement included a comment that inflation was below levels it judged as consistent with its mandate to promote employment and price stability, and the market will also watch the personal consumption expenditure deflator.
Dollar/yen, which is sensitive to falls moves in U.S. Treasury yields, held steady at 83.50 yen, supported by market nervousness that Japanese authorities might intervene.
As the dollar has fallen as far as 83.16 this week without signs of intervention, traders and analysts say one potential trigger point could be a drop to the 82.87 yen 15-year low.
On the charts, its bounce from Thursday's low was helping it work at 83.50-55 resistance. A sustained break of that resistance would target Thursday's high of 83.80 yen but it needed to crack 84.10 for a push towards its post-intervention peak around 85.95.
Data late on Thursday showed Japanese authorities spent 2.12 trillion yen, or $25.4 billion, on currency intervention in the month to Sept. 28.
This was roughly in line with market estimates of 2 trillion for Sept. 15 alone, the only confirmed instance of Japanese currency intervention during that period. (Additional reporting by Reuters FX analyst Krishna Kumar in Sydney; Editing by Chris Gallagher)