* Dollar maintains bulk of gains made on robust payrolls report
* Euro largely shrugs off fall in German production
TOKYO, Aug 8 (Reuters) - The dollar steadied in Asian trading on Tuesday, maintaining most of the gains it made on last week's robust employment data that kept hope alive that the U.S. Federal Reserve could still increase interest rates this year.
The dollar index, which tracks the greenback against a basket of six major rivals, was steady on the day at 93.412 . It held well above last week's 15-month low of 92.548, though was shy of Friday's post-jobs data high of 93.774 as investors pondered the timing of the U.S. central bank's next tightening steps.
"Looking to the Fed futures market, there's less than a 50 percent chance of one more rate hike this year," said Bill Northey, chief investment officer at U.S. Bank Private Client Group in Helena, Montana.
Investors also await clues as to when the Fed will begin shrinking its $4.2 trillion bond portfolio.
"The September meeting is where we are anticipating the identification of the start date and we would not be surprised to see it start in an almost an immediate fashion," he said.
U.S. producer prices for July due on Thursday and consumer price index figures on Friday will give investors a clue about the extent to which the strengthening labour market is spilling over into inflation.
Last Fridays' jobs report showed nonfarm payrolls increased by a bigger-than-forecast 209,000 jobs in July, while average hourly earnings increased 0.3 percent to match expectations after rising 0.2 percent in June.
Comments on Monday from St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari had a muted impact on the dollar.
Bullard said the Fed can leave interest rates where they are for now because inflation is not likely to rise much even if the U.S. job market continues to improve.
The personal consumption expenditures (PCE) price index excluding food and energy, which is the Fed's preferred gauge of inflation, has been running at 1.5 percent and has trended away from the central bank's 2 percent target in recent months.
That measure is forecast to rise only to 1.8 percent if the U.S. unemployment rate falls to an "unprecedented" 3 percent from the current 4.3 percent, Bullard said. With so little upward pressure on inflation, the Fed does not need to raise rates to slow growth, he said.
Bullard's assessment provides market participants with further credence as to why the dollar has not strengthened much, even after the solid jobs data, Northey said.
Against its Japanese counterpart, the dollar edged up to 110.78 yen.
It was also steady against the euro, which was buying $1.1800.
On Monday, the single currency largely shrugged off an unexpected fall in German industrial production in June.
(Reporting by Lisa Twaronite; Editing by Eric Meijer)