* Dollar dipping in Asia, euro benefits from oil pullback

* Markets await more clarity on US-Iran talks

* Yen underpinned by risk of Japanese intervention

By Wayne Cole

SYDNEY, May 7 (Reuters) - The dollar remained on the

defensive on Thursday as hopes for a de-escalation in the

Iran-U.S. war supported oil-exposed currencies, while Tokyo

resumed its verbal intervention in support of the yen keeping

speculators cautious.

Iran said on Wednesday it was reviewing a U.S. peace

proposal that sources indicated would formally end the war but

leave unresolved key U.S. demands that Iran suspend its nuclear

program and reopen the Strait of Hormuz.

Analysts were worried any agreement that did not open the

vital waterway to shipping would likely see oil prices rise

again, with Brent edging 0.8% higher in early trading.

"It remains far from clear that there is any material

movement toward reopening the Strait, or if we are instead stuck

in a rebranded 'ceasefire with no oil' purgatory," wrote Helima

Croft, head of global commodity strategy at RBC Capital Markets.

"A corner of the market will undoubtedly view a one-page

memorandum to resume negotiations over the next thirty days as

significant progress," she added. "However, an MoU is unlikely

to translate into an immediate resumption of shipping traffic

and major production restarts."

Hopes for de-escalation had seen oil prices slide overnight,

easing inflationary fears and pulling down Treasury yields as

markets pared back the risk of U.S. rate hikes.

That left the dollar index back at 97.950 and well

short of last week's top of 99.092.

The pullback in oil had boosted the euro, given the

continent is far more reliant on imported oil than the United

States, and it was 0.1% firmer at $1.1757 having

touched a two-week top of $1.1797 overnight.

The yen had gotten a further lift from speculation the

Japanese authorities had intervened on Wednesday to buy the

currency, sending the dollar as low as 155.00 at one

stage.

The dollar was last trading at 156.15, with dealers on guard

after Japan's top currency diplomat Atsushi Mimura said the

country was not restricted on intervention.

U.S. Treasury Secretary Scott Bessent will reportedly meet

Japan's Prime Minister Sanae Takaichi next week to discuss

curbing speculative yen selling, among other issues.

Sources told Reuters that authorities intervened on Thursday

last week, with money market data suggesting they sold about $35

billion to support the yen. Since then, the market has seen

three abrupt spikes in the yen through to Wednesday.