* China allows yuan to rise 0.4% to post-devaluation high
* Euro rebounds to 4-wk peak, Aussie hits 1-month high
* China move seen as helping global economy
By Satomi Noguchi
TOKYO, June 21 (Reuters) - The Australian dollar and the euro jumped to their highest levels in about a month against the dollar on Monday after China allowed the yuan to rise to a post-revaluation high, boosting confidence in the global economy.
Spot yuan rose to its highest level since its revaluation five years ago, helping to reinforce market optimism that a pledge from China on yuan flexibility would help reduce the global imbalance, encouraging sustained global growth and supporting higher-yielding and riskier assets. [ID:nBJD003795]
"China's commitment to allowing more yuan flexibility is definitely an encouraging factor for stability in the market," said Hideki Amikura, deputy general manager of the forex section at Nomura Trust Bank.
"It is a sign that China is ready to act responsibly to fix global imbalances and avoid potential international conflicts," he said.
The yuan rose as high as about 0.4 percent to 6.8015 per dollar CNY=CFXS after China broke away from its 23-month-old currency peg.
That was enough for the the Aussie and the euro to recover from initial disappointment after China set the yuan's daily mid-point CNY=SAEC at 6.8275 against the dollar on Monday, unchanged from last Friday, the day before Beijing said it would allow the yuan to trade more flexibly.
"You can't gauge Beijing's stance on the yuan just from today's mid-point. Obviously we will have to see how much yuan appreciation they allow for the time being," said Shuichi Kanehira, head of forex spot trading at Mizuho Corporate Bank.
The Aussie AUD=D4 gained 1.2 percent to around $0.8824, rising as high as $0.8830, a one-month peak.
The New Zealand dollar NZD=D4 also rose nearly one percent to $0.7121, after having climbed to a five-week high of $0.7140.
The euro EUR= gained to $1.2457, up 0.6 percent. It earlier marked a four-week high around $1.2490 in early Asian hours.
The dollar gained 0.1 percent to 90.77 yen JPY=, rebounding higher from an earlier three-week low of 90.01 on trading platform EBS.
Westpac senior currency strategist Imre Speizer said for a variety of reasons the yuan weekend statement was seen as positive for commodity currencies such as the Australian and New Zealand dollars, including the prospect of improved exports to China.
"This move may also have been designed to reduce friction at the G20 meeting involving trade issues," Speizer said.
The yuan's value had been seen as a potential point of conflict at the Group of 20 summit in Toronto on June 26-27, as Washington pressed for moves to a market-based exchange rate, while Beijing had said the currency was its own business and outsiders should not meddle.
Scott Haslem, chief economist at UBS in Sydney saw the dollar reaching 6.55 yuan by year end, with this appreciation of between 3 and 4 percent likely achieved in the next few weeks.
A more flexible yuan would lessen the threat of a Sino-U.S. trade war, which could have been a danger to global growth, and enable China to buy more commodities, or at least cope better with higher commodity prices, a positive for big resource exporters like Australia and New Zealand.
A higher yuan would also help temper inflation in China by pushing down import prices, which in turn could mean Beijing would have less need to tighten monetary policy aggressively.
Markets have been worried China could over-tighten and slow its economy too far.
Breaking the peg might mean China needs to buy less U.S. dollars in intervention, which would leave it with fewer dollars to buy U.S. Treasuries, but also less need to diversify its holdings into currencies like the euro. (Additional reporting by Gyles Beckford in Wellington; Editing by Joseph Radford)