(Updates at 1910 GMT)

By Hannah Lang

NEW YORK, April 4 (Reuters) - The dollar hit a two-week

low on Thursday as economic data supported expectations for

quick interest rate cuts in the U.S., and fell against the

battered yen.

An unexpected slowdown in U.S. services growth, supporting

the idea of bringing interest rates down, had pushed the dollar

lower on Wednesday.

Still, the U.S. currency was able to pare some earlier

losses after Minneapolis Federal Reserve President Neel Kashkari

said rate cuts might not be required this year if inflation

continues to stall.

Richmond Fed President Thomas Barkin said on Thursday that

inflation data at the start of this year "has been a little less

encouraging," and raises the question of "whether we are seeing

a real shift in the economic outlook, or merely a bump along the

way."

The dollar index, which measures the U.S. currency

against six rivals, was down 0.077% at 104.14 after hitting

103.910, its lowest level since March 21.

The major focus for the rest of the week will be on the

release of the monthly U.S. employment report on Friday.

Economists polled by Reuters are forecasting 200,000 jobs were

added in March.

"Powell seems to still be targeting a June rate cut and

that's why I think that this labor report, the reaction could be

amplified, particularly if we see non-farm payrolls coming in on

the lower side of expectations or below expectations," said

Paresh Upadhyaya, director of fixed income and currency strategy

at Amundi US.

The yen was close to its 34-year low versus the greenback as

the Bank of Japan's historic policy shift to end eight years of

negative interest rates has failed so far to bolster the

currency.

The rates picture, with U.S. 10-year yields at more than 4%

and Japan's still close to zero, is keeping big Japanese

investors' cash abroad, where it can earn better returns,

depriving the yen of support from repatriation flows.

The yen was up 0.27% versus the dollar at 151.28,

after hitting 151.975 last week.

Japanese authorities will likely intervene in the currency

market if the yen breaks out of a range it has been in for years

and weakens well beyond 152 per dollar, former top Japanese

currency official Tatsuo Yamazaki said on Thursday.

"I'm not sure they'll draw the line right at 152, but I

think that somewhere near 152 they have to jump in there," said

Steve Englander, head of global G10 FX research and North

America macro strategy at Standard Chartered Bank in New York.

The Swiss franc dropped around 0.6% against the dollar

after data showed the Swiss consumer price index rose by

a lower-than-expected 1.0% from a year ago in March.

The Swiss franc fell on Thursday to 0.9848 against the euro,

its lowest level since early May 2023. A day earlier, it dropped

to 0.9095 against the dollar, its lowest level since early

November 2023.

Analysts said the further drop in Swiss inflation in March

reinforced the view that the Swiss National Bank would cut rates

by an additional 50 basis points this year.

The euro was up 0.12% on Thursday and back to the

middle of a range it has kept for a year at $1.085.

European inflation came in softer than expected on

Wednesday, reinforcing expectations for a European rate cut in

June.

Traders gave a leg up to the Australian and New Zealand

dollars in response, sending the Aussie above its 200-day moving

average and to a two-week high of $0.66180.

The New Zealand dollar has regained a foothold

above $0.60 and was last trading 0.33% higher at $0.603. Traders

expect New Zealand rate cuts to begin in August but Australian

rates to be on hold until November.

Chinese markets were closed for a holiday.

In cryptocurrencies, bitcoin was last up 4.3% at

$68,552, while ether was last 2.08% higher at $3,375.3.