FOREX-Dollar firmer vs yen and Swiss franc as stocks stabilise

(updates, adds details about Chinese FX reserves)

* Yen drops as European and Japanese stocks start week higher

* U.S (Other OTC: UBGXF - news) . data fails to provide clarity on Fed rate-hike timing

* Chinese FX reserves shows biggest monthly drop

By Anirban Nag

LONDON, Sept 7 (Reuters) - The dollar rose against the safe-haven yen and Swiss franc on Monday, regaining some poise as European and Japanese stock markets started the week with gains that underpinned risk sentiment.

Volumes are expected to wane later in the session with the United States closed for a holiday.

And with Chinese stocks ending in the red after a four-day holiday, most investors were cautious before the monthly update on China's economic health in the coming week, with August global trade data out on Tuesday unlikely to offer much solace.

At the G20 meeting at the weekend, policymakers agreed to oppose competitive devaluations and give more transparency in communicating policy shifts, but gave investors little insight into future macro trends.

On Friday, a mixed U.S. jobs report gave few clues to investors trying to determine when the Federal Reserve will finally hike interest rates.

The dollar was up 0.35 percent against the yen at 119.40, moving away from the day's low of 118.66 and taking back some of Friday's 1 percent tumble. It (Other OTC: ITGL - news) was up 0.3 percent against the Swiss franc at 0.9745.

The euro was steady at $1.1145, having gained in recent weeks as investors unwound euro-funded carry trades in which they borrowed euros to invest in high-yielding currencies.

"While there was some weakness in Chinese stocks, it wasn't a capitulation which many had feared. So investors are not as risk averse, with Japan's Nikkei closing with gains," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

"So the dollar remains a buy as the non-farm payrolls was reasonably constructive."

U.S. nonfarm payrolls increased less than expected last month, marking a slowdown from July's upwardly revised gain, but the jobless rate dropped to its lowest in almost 7-1/2 years and wages accelerated.

The figures came amid anxiety about falling global stocks markets and China's slowing economy, which have led investors to pare back bets that the Fed will raise interest rates as early as its meeting this month.

Data from China showed foreign exchange reserves posting their biggest monthly fall on record in August, reflecting Beijing's attempts to halt a slide in the yuan and stabilise financial markets following its surprise move to devalue the currency last month.

China's reserves, the world's largest, fell by $93.9 billion last month to $3.557 trillion. It was much lower than the $150-180 billion that some reckoned Beijing spent, but analysts said with China's reserves dropping, the euro - a big beneficiary in the past decade when reserves were rising - would suffer.

"Over a period time, depending upon the way the Chinese rebalance their reserves, it will have an impact on the major currencies," Geoffrey Yu, currency strategist at UBS (NYSEArca: FBGX - news) , said.

In a study released last week, Deutsche Bank (Other OTC: DBAGF - news) analysts estimated that for every $100 billion reduction is global reserves, euro would fall by 3 big figures. (Editing by Alison Williams)