* Euro dips vs dollar from late NY, near 5-week highs
* Euro rose previous day as European shares gained
* Break for Euro eyed above $1.2500-$1.3000 range
By Masayuki Kitano
TOKYO, March 17 (Reuters) - The euro dipped against the dollar on Tuesday but hovered in sight of five-week highs hit the previous day, after a rise in European equities pointed to some recovery in risk appetite.
European share indexes closed higher for a fifth straight session and helped the euro climb to $1.3072 on trading platform EBS on Monday, although it later trimmed its gains as U.S. shares finished lower.
With its rise on Monday, the euro is showing tentative signs of breaking above a range roughly between $1.2500 and $1.3000 that has held for the past month and a half, said a trader for a Japanese trust bank.
But it is still too early to say with conviction whether the euro is ready to break out of this familiar zone, he said.
"There is some sense that it may have broken out of the range, but it will be better to see the weekly closing level to confirm it," the trader said.
"If the euro can clear the $1.3000 level at the end of the week, expectations for a further rally will probably grow," he said.
The euro dipped 0.1 percent against the dollar from late U.S. trading on Monday to $1.2957. Against the yen, the euro rose 0.1 percent to 127.48 yen, hovering near a 2-½ month high of 128.74 yen hit on Monday.
The dollar rose 0.2 percent against the yen to 98.37 yen, having hit a four-month high of 99.69 yen in early March.
The dollar often attracts buying when risk appetite declines in times of financial market stress, but tends to weaken when risk appetite recovers.
Market players have cited dollar selling by Japanese exporters as a factor that has tempered the dollar's gains against the yen this month.
But the trader for a Japanese trust bank said such dollar-selling by Japanese exporters seemed relatively subdued for this time of year.
"What you can say compared to past years is that the selling pressure has been weak," he said.
Japanese exporters often start to gradually hedge their foreign currency exposure for the April-June and July-September quarters around now, but an uncertain outlook for their overseas sales in the financial year that starts in April may be curbing their activity in the currency market, the trader said.
Both the Bank of Japan and the Federal Reserve are expected to keep interest rates unchanged at two-day policy meetings, both ending on Wednesday. (Editing by Michael Watson)