FOREX-Yen slumps, dollar jumps as rate cut bets recede

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Yen slides back to where it began the year

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Euro falls to $1.15; Kiwi hits 7-month low

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Expectations for US cut in December below 25%

By Tom Westbrook

SINGAPORE, Nov 20 (Reuters) - The dollar was riding high on Thursday after notching its sharpest gain in six weeks as Fed minutes made a December U.S. rate cut seem less likely, while the yen tumbled on bets that Japan would not immediately step in to stem its weakness.

The yen fell 1% to a 10-month low of 157.18 per dollar overnight in a slide that began after Finance Minister Satsuki Katayama said there was no specific discussion on foreign exchange at a meeting with Bank of Japan Governor Kazuo Ueda.

The yen is down around 6% since Prime Minister Sanae Takaichi was elected leader of her party, in spite of rising Japanese yields, as markets are uneasy about the scale of borrowing needed to fund her stimulus plans.

"You must either believe that there's a 'Sell Japan' narrative going on, or you take the view that these relationships are no longer stable," said Vishnu Varathan, Mizuho's head of research in Asia, referring to how the yen has fallen even while the U.S.-Japan rate gaps have narrowed.

The yen hovered around 157 to the dollar in morning trade, near where it began the year, and traders now figure Japanese authorities may step in somewhere around the 160 mark, or if there are any more sudden moves.

Beyond Japan, the euro, sterling, kiwi and Aussie all fell against the dollar after minutes from October's Federal Reserve meeting showed "many" participants had already ruled out a December cut, while "several" saw a December cut as likely.

"In Fedspeak, 'many' means more than 'several', so I think there's a bit of a hawkish message that's supporting the dollar," said Bank of Singapore strategist Moh Siong Sim.

The euro notched about a 0.4% fall overnight and was steady in early trade on Thursday at $1.1528. Sterling fell about 0.7% to a two-week low of $1.3043.

The New Zealand dollar dived 1% and touched a seven-month trough of $0.5591 as the outlooks for interest rates in New Zealand and the U.S. diverge.

A rate cut next week is fully priced in for New Zealand. In the U.S., expectations for a December cut have fallen below 25%, after being priced as a near-certainty a month ago.

The dollar index rose 0.5% overnight, climbing through its 200-day moving average, and was last up 0.1% at 100.17. (Reporting by Tom Westbrook; Editing by Tom Hogue)