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TOKYO, July 10 (Reuters) The dollar struck a one-month low against the yen on Monday after data showed U.S. jobs growth fell short of expectations and slightly tempered expectations for the Federal Reserve to raise interest rates again in August.

The yen was supported by expectations that the Bank of Japan will raise rates later this week -- for the first time in nearly six years.

Some traders said the yen may not have much more to gain from the BOJ's expected policy change, with a rate rise to 0.25 percent from zero now seen almost certain.

''The market is now more focused on the pace of the BOJ's rate hikes after the initial increase,'' said Kikuko Takeda, currency strategist at Bank of Tokyo-Mitsubishi UFJ.

The BOJ will announce its decision at the end of a two-day policy meeting on Friday.

By 0525 GMT, the dollar was down 0.4 percent at 113.60 yen, around the day's low and a level last seen in early June.

The euro dipped to $1.2795, off a one-month peak of $1.2865 marked on Friday.

The European currency traded around half a percent lower at 145.35 yen, well off the record high of 147.42 yen hit last week.

''There's been some profit taking on the euro/yen after it hit the all-time high, and that is also weighing on the dollar/yen,'' said Fumihiko Kawano, forex manager at Nomura Securities.

Data showing a smaller-than-expected fall in Japanese machinery orders in May had little impact on the currency market.

Orders fell 2.1 percent from a month earlier, slightly better than expectations for a drop of 5.3 percent.

JOBS SURPRISE The U.S. Labor Department's employment report showed U.S.

employers added 121,000 jobs in June, well down from economists' forecast in a Reuters poll for 185,000.

The figures highlighted concerns about a slowdown in the U.S.

economy, though dealers said a big gain in wages left inflation concerns intact, leaving a lot of market players still betting on another rate increase.

Average hourly earnings rose 3.9 percent from a year earlier -- the largest gain in five years, leading many traders to conclude the Fed might prefer to raise rates next month to pre-empt a possible spike up in wage-led inflation.

''Given the average hourly earnings, I would say there's a sign of wage-led inflation,'' said a trader at a Japanese bank. ''The dollar may not fall that much. Japanese importers have been eager to buy the dollar around 113 yen.'' Interest rate futures markets showed investors' expectations the Fed will raise rates in August dropped to a 62 percent chance after the data was released from 70 percent.

Some analysts said the recent standoff between North Korea and the major powers over Pyongyang's missile testing could hurt Asian assets, including the yen.

''Some investors who have built up investments in Japanese and Korean stocks may feel it's time to offload some of their holdings,'' said Takeda at Tokyo-Mitsubishi.

The United Nations Security Council could vote later in the day on a resolution drafted by Japan to impose sanctions on North Korea.

REUTERS CS PM1117