* Aussie slides after RBA cuts interest rates
* Yen jumps against Aussie, hits 18-month high vs USD
* Dollar index touches lowest since January 2015 (Updates prices, adds RBA rate decision)
By Masayuki Kitano
SINGAPORE, May 3 (Reuters) - The yen hit a fresh 18-month high against the U.S. dollar on Tuesday and jumped against the Australian dollar, after Australia's central bank cut interest rates to a record low.
The U.S. dollar fell to 105.78 yen at one point, its lowest level since October 2014. The greenback last stood at 105.85 yen JPY= , down 0.5 percent on the day.
The yen added to its gains as the Australian dollar skidded after the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points to 1.75 percent. The market had been split on whether the RBA would ease policy on Tuesday. Australian dollar tumbled 1.8 percent against the yen to 80.08 yen AUDJPY=R .
Against the greenback, the Australian dollar slid 1.3 percent to $0.7568 AUD=D4 .
The RBA will probably lower its inflation forecast when it releases its quarterly statement on monetary policy on Friday, said Roy Teo, senior FX strategist for ABN AMRO (AS:ABNd) in Singapore.
"Hence another 25 basis point rate cut later this year in August cannot be ruled out," Teo said in a research note. He added that the Aussie dollar will probably find some support near $0.75 over the next few days.
YEN EXTENDS RALLY
The yen's rise to fresh 18-month highs against the U.S. dollar occurred in thin trading conditions with Japanese markets closed from Tuesday to Thursday for public holidays.
As the yen's strength persisted, Japanese media reports said Japanese Prime Minister Shinzo Abe and French President Francois Hollande agreed that sudden moves in foreign exchange rates were undesirable. a continuation, it's a weak dollar theme and yen seems to be the leader," said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
Last week, the yen produced its biggest weekly gain since 2008 - more than 5 percent against the dollar - as the Bank of Japan held off from expanding its monetary stimulus.
The yen also rose this week after the U.S. Treasury Department said on Friday that it was creating a new "Monitoring List" that includes China, Japan, Korea, Taiwan, and Germany which all have large current account surpluses.
The U.S. Treasury also noted that "current conditions in the dollar-yen foreign exchange market are orderly" - widely interpreted as a caution to Japanese officials not to intervene to weaken the yen. yen's rise has persisted even after Finance Minister Taro Aso was quoted by Japanese media over the weekend as saying Japan's actions in the currency markets will not be constrained by the country's inclusion in the new U.S. monitoring list. by the yen have come at a time when the dollar has been on the defensive because the U.S. Federal Reserve is seen in no hurry to raise interest rates.
On Tuesday, the dollar inched down against a basket of six major currencies, at one point slipping to a low of 92.300 .DXY , its lowest level since January 2015.
The euro rose 0.2 percent to about $1.1551 EUR= , having touched a high of $1.1561, its strongest level since August.