* Dollar firms against euro, yen on firmer U.S. Treasury yields
* ECB willing and able to act if needed at December review
* Aussie outperforms, double whammy hits kiwi hard
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, Nov 4 (Reuters) - The dollar firmed on Wednesday in line with higher U.S. Treasury yields, as a regional rally in equities whetted investors' appetite for risk.
The dollar index .DXY , which tracks the U.S. currency against a basket of six major rivals, last stood at 97.342, up about 0.2 percent, adding to its 0.3 percent gain the previous session and moving back toward a 2-1/2-month high of 97.818 touched on Oct. 28.
The euro dipped about 0.2 percent to $1.0939 EUR= after European Central Bank President Mario Draghi reiterated that further easing was on the table for December.
Against the yen, the dollar rose about 0.2 percent to 121.30 JPY= , pulling away from Tuesday's low of 120.60.
Asian shares surged after an overnight rally on Wall Street that pushed U.S. Treasury prices down and yields higher. The benchmark 10-year note yield US10YT=RR stood at 2.212 percent in Asian trade, not far from a 1-1/2-month peak of 2.225 percent scaled on Tuesday.
"Yields went up, which helped lift the dollar ahead of U.S. payrolls data later in the week," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank.
Economists expect U.S. employers to have added 180,000 jobs last month according to a Reuters poll.
An upbeat jobs report would lead to increased bets that U.S. Federal Reserve could be on track to raise interest rates next month.
A Chinese survey also helped investors' sentiment. Activity in China's services sector expanded at its fastest pace in three months in October thanks to stronger new business, the private Caixin/Markit Purchasing Managers' Index (PMI) showed, easing concerns over persistent weakness in the economy as manufacturing falters.
Meanwhile, a further decline in dairy prices and soft New Zealand jobs data battered the kiwi, while a slightly more upbeat outlook on the economy by Australia's central bank put a spring in the Aussie's step.
The Aussie climbed to its highest in a week at $0.7224 and was last up 0.4 percent at $0.7216. It was well off a recent low of $0.7067.
Aussie bulls took heart after the Reserve Bank of Australia chose to hold interest rates steady, rather than cut on Tuesday and surprised some by noting that "prospects for an improvement in economic conditions had firmed a little over recent months".
The market shrugged off the central bank's explicit easing bias.
In contrast, the kiwi jumped nearly two full NZ cents to NZ$1.0840- its biggest one-day rally against the Aussie in nearly two months.
"Given it moved so swiftly, it hints that the market missed this rally. However, it is not too late as we target 1.09 by year end," said Annette Beacher, chief Asia-Pacific macro strategist at TD Securities.
Against the greenback, the kiwi slid about 0.1 percent to $0.6658 NZD=D4 after bumping to a session low of $0.6633, peeling back from highs near 68 U.S. cents set in the past three sessions.
Official data early on Wednesday showed New Zealand posted its first quarterly fall in employment in three years. The data came hours after global dairy prices fell at a second consecutive auction. (Editing by Eric Meijer and Richard Borsuk)