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* Macron seen as clear favorite in French election
* Euro up 1.3 pct vs dollar after gaining as much as 2 pct
* Dollar up 0.6 pct vs yen at 109.75 yen
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Sam Forgione
NEW YORK, April 24 (Reuters) - The euro surged against the U.S. dollar and the yen sank on Monday on relief over Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections.
The euro was last 1.3 percent higher against the dollar at $1.0866, not far from the 5-1/2-month high of $1.0935 it reached after the initial indications from the Sunday vote gave victory to Macron, as predicted by weeks of polling.
The same polls showed Macron defeating Le Pen by as much as 30 percentage points in two weeks' time, suggesting players can buy back into the currency.
"That gap is so significantly wide that it's hard to believe that Macron loses in the second round," said Mazen Issa, senior currency strategist at TD Securities in New York. Issa said investors would likely shift their attention to Thursday's European Central Bank meeting.
The euro's session high briefly put the currency up about 2 percent against the greenback. Sunday's outcome reduced the prospect of an anti-establishment shock on the scale of Britain's vote last June to quit the European Union and the election of Donald Trump as U.S. president.
Analysts said the euro's dip from its session high likely indicated profit-taking rather than doubts about a Macron victory over Le Pen in the second round.
Strategists at French bank Credit Agricole said their positioning measures showed the euro had been bought for most of the last week, suggesting that many players had already closed previous short bets against the currency.
As markets globally were comforted by the results of the French vote, investors abandoned the perceived security of the yen. The euro was last up 1.9 percent against the Japanese currency at 119.26 yen and the dollar was up 0.6 percent against the yen at 109.75 yen after touching a nearly two-week high of 110.62.
The results of the vote were soothing in part because fears of a potential Le Pen runoff with far-left candidate Jean-Luc Melenchon, both of whom distrust the European Union, did not play out.
"That nightmare scenario of Le Pen versus Melenchon is off the table," said Chris Konstantinos, director of international portfolio management at RiverFront Investment Group in Richmond, Virginia.
The dollar index, which measures the greenback against a basket of six major rivals, was last down about 1 percent at 99.031.
Reporting by Sam Forgione; Additional reporting by Patrick Graham in London; Editing by Meredith Mazzilli and Steve Orlofsky