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TOKYO, May 11 (Reuters) The dollar rose on Thursday, recovering further from multi-month lows against the euro and the yen, after the U.S. Treasury stopped short of naming China a currency manipulator in a much-anticipated report.

The report on currency practices was viewed in the market as slightly positive for the dollar, especially against Asian currencies such as the yen, seen as a proxy for China's yuan currency ''The short-term fear of a dollar crash has gone,'' said the chief trader at a European investment bank in Tokyo. ''From here on we should see a normal market.'' The dollar tumbled to a fresh one-year low against the euro and an eight-month trough versus the yen earlier on Wednesday, after a Federal Reserve interest rate decision failed to alter a view that the central bank is near the end of its two-year tightening cycle.

In the statement accompanying its 25-basis-point rate rise to 5 percent, the Fed said it may need to raise rates further to keep inflation down, but further tightening would increasingly depend on the economic outlook.

In a Reuters poll taken after the Fed statement, 14 of 20 Wall Street bond dealers said they expect the central bank to stand pat at the next policy meeting at the end of June.

In early Tokyo trade the dollar rose to 110.85 yen from 110.50 yen in late U.S. trade on Wednesday, when it fell as far as 110.10 yen.

The euro bought $1.2765, down from around $1.2785 but in sight of the one-year high of $1.2838 marked on electronic trading platform EBS.

Although the Treasury report did not name China as a currency manipulator, U.S. Treasury Secretary John Snow said in a statement that the Bush administration was ''extremely dissatisfied'' with the slow pace at which China was adopting a more flexible currency regime.

REUTERS PDS PM0620