* NZ dollar hits 1-year high after RBNZ holds rates steady
* Dollar index near 5-week lows as Fed hike expectations recede
* Euro touches four-week highs even after Bund yields drop (Updates prices, adds comments)
By Masayuki Kitano and Lisa Twaronite
SINGAPORE/TOKYO, June 9 (Reuters) - The New Zealand dollar took centre stage on Thursday, surging to a one-year high after the Reserve Bank of New Zealand kept interest rates unchanged, surprising some investors who had been betting on a rate cut.
The kiwi was up 1.7 percent at $0.7140 NZD=D4 and climbed to $0.7148 at one point, reaching a high not seen since June 2015 after the RBNZ held rates steady but retained an easing bias. U.S. data continues to disappoint, the kiwi could continue to push higher in the near term," wrote Angus Nicholson, market analyst at IG in Melbourne.
"However, risks to the downside are clearly the potential for another RBNZ rate cut in August or a run of better than expected U.S. data," he said.
Reserve Bank of New Zealand governor Graeme Wheeler said at a media conference the central bank would not hesitate to adjust interest rates if needed. added that inflation expectations have stabilised and that some inflation pressures were beginning to come through. into the central bank decision, some short-term speculators seem to have put on bearish bets against the New Zealand dollar, said Stephen Innes, senior trader for FX broker OANDA in Singapore, adding that their short-covering likely helped add to the kiwi's bounce on Thursday.
The RBNZ governor's post-meeting remarks also helped bolster the kiwi, as there were no concrete hints that the central bank would cut interest rates very soon, Innes said.
"I don't think there was any clear-cut forward guidance that the market could read from that and I think that's why we're seeing the trend continue," he said, referring to the kiwi's rise.
The dollar index inched 0.1 percent lower to 93.515 .DXY , not far from a one-month low of 93.425 plumbed on Wednesday amid fading expectations the U.S. Federal Reserve would raise interest rates as early as its meeting next week.
U.S. interest rate futures implied traders saw nearly no chance the Fed would increase rates at its two-day policy meeting ending next Wednesday FFM6 , according to CME Group's (NASDAQ:CME) FedWatch, after last week's downbeat employment data pushed back expectations of an imminent rate hike.
The dollar was 0.3 percent lower at 106.63 yen JPY= , moving back toward Monday's one-month low of 106.35.
Data showed that Japan's core machinery orders tumbled 11 percent in April from the previous month, more than the median estimate of a 3.8 percent drop, in a worrying sign for business investment. euro rose 0.1 percent to $1.1405 EUR= , and set a fresh four-week high of $1.1416 even after German Bund yields notched record lows on Wednesday as the European Central Bank began buying corporate debt for its stimulus programme.
Uncertainty over the outcome of Britain's June 23 referendum over whether to remain in the European Union has increased demand for safe-haven Bunds, pressuring their yields. pound GBP=D4 , which has whipsawed in recent sessions on divergent surveys on the likely vote outcome, eased 0.1 percent to $1.4494.