FOREX-U.S. dlr underpinned by yields; euro under pressure

* Dollar extends gains vs yen as UST yields rise

* U.S. industrial production data upbeat, inflation still tame

* Euro under renewed selling pressure

By Ian Chua

SYDNEY, Aug 16 (Reuters) - The dollar held near a fresh one-month high against the yen in early Asian trade on Thursday, while the euro nursed modest losses having succumbed to a bit of selling pressure overnight in thin market conditions.

Traders said selling in euro crosses was a major driver in an otherwise non-eventful session. The euro plumbed a two-week low on sterling, reaching 78.21 pence, and dipped to $1.2264 on the greenback, pulling further away from Tuesday's high of $1.2386.

Sebastien Galy, strategist at Societe Generale said rumours of SNB activity had helped to reinforce the downward pressure on the euro.

The Swiss National Bank has been buying a lot of euros in order to keep the 1.20 francs per euro floor intact and traders said it wouldn't surprise them if the SNB has been diversifying those euro holdings into other currencies.

That helped the dollar index pop back up to 82.706 from a low of 82.196 set on Tuesday. Against the yen, the dollar continued to gain ground thanks to a further rise in U.S. Treasury (UST) yields. The greenback peaked at 79.06 and was last at 79.03.

"We will eventually move back lower as we continue a fairly tight range in UST. The US maybe growing and the global economy stabilizing, but it is still a very slow growth path," Galy added.

Data on Wednesday showed U.S. industrial output expanded last month at the fastest pace since April and manufacturing notched another solid advance, yet inflation remained tame. Traders said the lack of price pressure should give the Federal Reserve room to ease policy further if needed.

Commodity currencies had a better night as well after being hit by disappointing Chinese data last week and a string of downbeat media reports about the health of the world's second biggest economy.

The Australian dollar edged up to $1.0499 after finding support at a two-week trough around $1.0456. Its New Zealand counterpart climbed to $0.8072 from a three-week low around $0.8038.

Immediate resistance for the Aussie is seen around $1.0517, the 38.2 percent retracement of its Aug 9-15 fall. For the kiwi, the first barrier is seen near $0.8110, the 38.2 percent retracement of its Aug 6-15 decline.

Asia faces another near data-free session on Thursday, while Europe has UK retail sales and euro zone inflation reports. In the United States, factory activity in the mid-Atlantic region, housing starts, building permits and weekly jobless benefits claims take centre stage.