* US says yuan undervalued, doesn't say China manipulates
* Geithner says watching how far, fast yuan rises
* Lack of manipulator label could spur lawmakers to action (Recasts with official announcement, adds reaction)
By Doug Palmer and Glenn Somerville
WASHINGTON, July 8 (Reuters) - The U.S. Treasury Department again declined to label China a currency manipulator in a long-delayed report issued late on Thursday that is likely to provoke Congressional calls for tougher methods with Beijing.
Some U.S. lawmakers have claimed that a misalignment in China's yuan currency distorts trade and steals jobs.
The Treasury's semiannual currency report, which originally was due on April 15, said China's yuan remains undervalued but noted Beijing had made a "significant" move last month by ending a peg between the value of the yuan, also called the renminbi, and the dollar.
"What matters is how far and how fast the renminbi appreciates," Treasury Secretary Timothy Geithner said in a statement issued with the report.
"We will closely and regularly monitor the appreciation of the renmimbi and will continue to work towards expanded U.S. export opportunities in China," he said.
One week before a meeting of Group of 20 leaders in Canada last month, Beijing freed its currency from a nearly two-year-old peg to the dollar and has let it rise slightly in value since.
U.S. legislators have proposed revamping U.S. trade and currency legislation to make it easier to take punitive actions against countries that have "fundamentally misaligned" currencies that effectively give them an unfair price advantage over American-made products.
The chairman of the U.S. House of Representatives Ways and Means Committee, Sander Levin, said the United States should keep "all options" open to pressure China on its currency, following the release of the report.
"We must monitor China's progress, but also give serious consideration to all options in the event -- as was the case in 2005-2008-- that China fails to take the additional necessary steps representing steady and significant progress," Levin said.
He said "Congress and the Administration should fully explore the option of challenging China's current practices through a WTO complaint." (Additinal reporting by David Lawder; Editing by Leslie Adler)