* Dollar/yen could test July's low of Y91.73 near term
* Market more sensitive to weaker economic news
* Investors await comments by ECB's Trichet
By Kaori Kaneko
TOKYO, Sept 3 (Reuters) - The yen touched a seven-week high against the dollar on Thursday as investors cut dollar holdings after a worse-than-expected U.S. private-sector jobs report renewed concerns that the recovery in the world's largest economy will be gradual at best.
The yen was holding firm against other major currencies in thin trade as investors refrained from building large positions ahead of U.S. non-farm payrolls figures on Friday.
"Market sentiment has tilted to become more sensitive to weaker economic news, although the recent U.S. economic figures were not significantly negative," said Mitsuru Sahara, chief manager of currency derivatives trading at Bank of Tokyo-Mitsubishi UFJ.
"As stocks have been staggering recently, it's been having an impact on the currency market," he said.
The dollar fell as low as 91.94 yen on trading platform EBS, its lowest since July 13. The U.S. currency later edged back to 92.16 yen, down 0.1 percent on the day.
Dealers said the dollar could fall to July's low of 91.73 yen in the near term once it clearly broke below 92.00 yen.
Against a basket of currencies, the dollar was steady at 78.387.
"The yen is probably playing catchup after the dollar's recent rise," said Jonathan Cavanagh, a currency strategist at Westpac.
"But below 92 yen levels I think is a good opportunity to go long on the U.S. dollar, especially ahead of the U.S. jobs report on Friday, which could surprise markets on the upside."
The U.S. government will release the nonfarm payrolls report for August, which includes public- and private-sector jobs.
Economists polled by Reuters expect job losses of 225,000 for August, which would be the least for any month since August 2008, after 247,000 workers were laid off in July.
A weaker reading, however, could drive the dollar down to the 90 yen level, traders said.
Investors were also eyeing an interest rate decision later on Thursday by the European Central Bank, which is widely expected to keep interest rates at 1.0 percent.
But ECB President Jean-Claude Trichet may caution against growing talk of a speedier recovery in the eurozone.
The euro was at $1.4260, steady from late U.S. trade on Wednesday. Against the yen, the euro was little changed at 131.50 yen after touching seven-week low of 131.01 yen on EBS the previous day.
The Australian dollar was little changed at $0.8338 after news that Australia's trade deficit for July widened to a seasonally adjusted A$1.556 billion compared with a Reuters' poll forecast of an A$850 million deficit.
The Aussie jumped nearly 1 percent on Wednesday after robust second-quarter gross domestic product numbers boosted expectations for a near-term rate hike. (Additional reporting by Anirban Nag in Sydney; Editing by Michael Watson)