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FOREX-Dollar extends gains on rising U.S. yields

* Upbeat U.S. non-farm payrolls data supports dollar

* Dollar gains against euro on higher U.S. yields

* Yen weaker against dollar despite GDP revision

(Updates prices, adds new analyst comments)

NEW YORK, June 9 (Reuters) - The dollar rose against a basket of major currencies on Monday as a rise in U.S. government bond yields underpinned support for the greenback following last week's strong U.S. jobs report.

The dollar extended gains against the euro after the European Central Bank unveiled its latest monetary policy measures to combat deflation last week, which included cutting its main rates to record lows.

"The price action today is very much an ongoing after-effect of the ECB's actions last week," said Richard Franulovich, senior currency strategist at Westpac Securities in New York. He said higher yields on U.S. Treasuries compared to European government bonds drew more demand for the U.S. currency.

German Bunds outperformed their U.S. counterparts, driving the 10-year yield gaps to 2005 and 2010 levels respectively. Benchmark 10-year U.S. Treasury notes were last down 3/32 to yield 2.61 percent.

The dollar also held gains broadly after the government said Friday the U.S. economy added 217,000 non-farm jobs and brought employment to its pre-recession levels, indicating the economy had snapped back from a harsh winter.

The U.S. dollar index, which measures the U.S. currency against a basket of six major currencies, was last up 0.29 percent at 80.644. The euro was last down 0.41 percent against the dollar at $1.3588. The dollar was up 0.45 percent against the Swiss franc to trade at 0.8973 francs.

The euro's weakness was still some distance, however, from a four-month low of $1.3503 hit last Thursday after the ECB announced its monetary stimulus measures. The dollar was last up 0.06 percent against the Japanese yen at 102.53.

Traders also said hawkish comments from St. Louis Federal Reserve bank president James Bullard boosted the dollar. Bullard, who is not a voter this year on monetary policy, said the falling U.S. unemployment rate, together with other encouraging economic data, could prompt him to move forward his view on when interest rates should be raised.

"There was definitely a hawkish undertone or bent to his comments," said Richard Cochinos a currency strategist at Citi in New York. He said the comments contributed to selling pressure on U.S. Treasuries and the stronger dollar.

Traders said the dollar would benefit from any signs the Fed might hike interest rates from their current low levels.

The dollar's strength against the euro after the ECB measures was broad and included the gains against the yen, despite a big upward revision of first-quarter Japanese growth.

The GDP data was skewed by the Japanese government's April 1 sales tax hike, which likely led consumers to spend money before it was imposed, said Franulovich. He expects a slump in Japanese growth in the second quarter.

(Reporting by Sam Forgione; additional reporting by Anirban Nag in London; Editing by Bernadette Baum and Diane Craft)