* NZ dollar jumps vs dollar, yen as rates seen near bottom
* Dollar edges up vs yen, off previous day's lows vs euro
* Geithner says dollar to remain world's reserve currency
By Masayuki Kitano
TOKYO, March 26 (Reuters) - New Zealand's dollar jumped more than 1 percent against the U.S. dollar and the yen on Thursday as investors searching for yield took the view that interest rates there were at or very near the bottom.
In an otherwise subdued Asian session, the U.S. dollar edged up against the Japanese currency and held steady against the euro, recovering from lows hit after U.S. Treasury Secretary Timothy Geithner said he was open to expanding the use of the International Monetary Fund's special drawing rights.
The kiwi surged to its highest in more than two months at $0.5774 and touched a four-month peak of 56.42 yen as New Zealand government debt yields surged in a sign investors were reining in expectations for lower rates.
"The New Zealand dollar is rising on the macro view that interest rates are edging towards the bottom," said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney.
New Zealand's cash rate stands at 3 percent and the central bank has signalled it does not expect to reduce rates much further, prompting home owners to refinancing in order to lock in at lower rates and leading to a rise in bond yields.
"A lot of guys want to buy the NZ dollar because yields are rising sharply and there are signs of renewed interest in carry trades," said Gerrard Katz, head of North Asia currency trading at Standard Chartered in Hong Kong.
Carry trades involve borrowing in one currency with low interest rates to buy higher-yielding assets in another and were a popular play against the yen before the global financial crisis.
The New Zealand dollar rose 1.25 percent to $0.5745 and 1.68 percent to 56.16 yen.
The Australian dollar fell 1.1 percent to NZ$1.2161, hitting a 10-week low and adding to broad strength in the kiwi.
DOLLAR EDGES UP
The dollar rose 0.2 percent from late U.S. trading on Wednesday to 97.71 yen, after dipping to 96.90 yen in S. stocks rose on Wednesday as unexpectedly strong housing and durable goods data fuelled hopes the economy is finally on the mend. (Additional reporting by Charlotte Cooper in Tokyo and Eric Burroughs in Hong Kong; Editing by Michael Watson)