* Yen slips vs dollar as political uncertainty weighs * Dollar, higher-yielding currencies supported * Euro resumes declines ahead of U.S. payrolls report

NEW YORK, June 3 (Reuters) - The U.S. dollar rose broadly on Thursday on bets for a strong reading for U.S. payrolls data while the yen fell for a second day versus the dollar due to political uncertainty in Japan.

Expectations for a strong payrolls report on Friday whet appetite for riskier assets and pushed the Australian and New Zealand dollars higher, along with some emerging market currencies. Investors tend to sell the low-yielding yen to fund such investments.

The euro resumed declines and touched a session low against the U.S. dollar and Swiss franc due to technical trading and position building ahead of U.S. payrolls, dealers said.

A weekly government reading on U.S. jobless claims and a monthly report on private-sector jobs released on Thursday showed signs of support for the U.S. economy. That prompted analysts to upgrade forecasts for monthly payrolls data.

The dollar is generally in a healthy position where stronger U.S. data is positive for the dollar, said Alan Ruskin, head of currency strategy at RBS Global Banking & Markets, in Stamford, Connecticut.

If U.S. data leads a risk downturn some questions will be asked of U.S. core fundamentals, but for now, the tendency is to give the U.S. the benefit of the doubt, and the euro no benefit.

In late morning trading in New York, the dollar was up 0.3 percent versus the yen at 92.40 yen. The euro EURJPY=R was little changed against the Japanese currency at 112.90 yen having earlier rallied above 114.00.

We're seeing the yen weaken overall..., which is pretty much an indication that risk-taking has rebounded in this market, said Joe Manimbo, a senior market analyst at Travelex Global Business Payments, in Washington.

Also, with the market speculating Japan's next prime minister would take a tougher stance in fighting the yen's strength, traders took this as an opportunity to trim long positions in the currency.

Finance minister and candidate for ruling party head -- and the premiership -- Naoto Kan surprised markets earlier this year by saying he wanted the yen to weaken more and that most businesses were in favor of a dollar/yen rate around 95 yen.

A sell-off in euro/Swiss franc came simultaneous with the drop in euro/dollar. Traders said markets took out weak stops in euro/dollar at $1.2220 and below 1.4100 in euro/swiss.

They added that option expiries in the single currency between $1.2300 and $1.2200 at 10 a.m. (1400 GMT) may have helped push the euro lower across the board.

The single currency was last down 0.5 percent against the Swiss franc at 1.4078 EURCHF= and 0.3 percent lower at $1.2209.

The Australian dollar rallied 0.4 percent versus the U.S. dollar to $0.8443. with the New Zealand dollar gaining around 0.3 percent against the greenback at $0.6834.

PAYROLLS EXPECTATIONS

A Reuters poll gave a consensus forecast U.S. payrolls data would show 513,000 jobs created in May. [ID:nN02176933]

Some economists are anticipating an even stronger figure, with BNP Paribas upgrading its forecast to an increase of 615,000. U.S. President Barack Obama added to optimism, saying on Wednesday the report would show strong growth. [ID:nN02175839]

The number of U.S. workers filing new applications for unemployment insurance fell as expected last week, according to government data. U.S. private employers added 55,000 jobs in May, according to a private report. For details, see [ID:nEAP102300] and [ID:nN02211844]

These reports show the labor market is in fact stabilizing, said John Doyle, senior currency strategist at Tempus Consulting, Washington. Fundamentals here are much stronger than they are across the pond, so that means interest rates should go up here first.

But given such lofty expectations for the Friday report, analysts said caution would be required going into the data given the heavy bullish positioning.

(Additional reporting by Steven C. Johnson, Gertrude Chavez-Dreyfuss in New York and Neal Armstrong in London; Editing by Andrew Hay)

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