* Market focus on stocks, commodity prices
* RBA seen keeping rates at record low 3%
* Watching for FX diversification comments ahead of G8
By Kaori Kaneko
TOKYO, July 7 (Reuters) - The yen held gains against other major currencies on Tuesday as receding optimism over the global economy prompted investors to pare back holdings of riskier assets.
The dollar recovered from a five-week low against the yen but remained weighed down in the wake of bleak U.S. employment data last week.
Investors will be watching the performance of Asian stocks and commodity prices after U.S. shares closed mixed and oil prices settled 4 percent lower on Monday.
"The market environment now is one of investors reducing risk betting and it has not fully returned to risk aversion. It's still in a phase of correcting excessive optimism over the economy recovery seen previously," said Akira Takeuchi, a manager at Chuo Mitsui Trust and Banking.
"The U.S. has had a mixture of positive and negative economic data, which needs to be examined closely. But the market is now prone to react to weak figures," he said.
The dollar dipped 0.1 percent from late Monday U.S. trade to 95.27 yen. It hit a five-week low of 94.66 yen the previous day.
The euro was down 0.1 percent at 133.20 yen after touching a two-week low of 131.73 yen on Monday.
Against the dollar, the euro was steady at $1.3984 after hitting a two-week low of $1.3876 the previous day.
Sterling was up 0.1 percent at $1.6287, recovering from a one-month low of $1.6095 hit on Monday. It was steady at 155.11 yen.
The Reserve Bank of Australia (RBA) will announce its monetary policy decision on Tuesday and is expected to hold interest rates steady at 3.0 percent for a third straight month.
The market has largely priced in the view that the RBA will keep rates unchanged and is looking to the accompanying statement to assess the outlook for policy moves, dealers said.
The Australian dollar inched up 0.1 percent to $0.7969 and was little changed at 75.90 yen.
Investors are also watching for any comments in the debate on the dollar's role as the world's reserve currency before the meeting of leaders of the Group of Eight industrial nations and leading developing nations on July 8-10 in Italy. (Editing by Michael Watson)