* Dollar tumbles on weaker than expected jobs growth

* Japanese yen rallies sharply, traders on intervention

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* Traders cut bets on September rate hike

(Updated in New York morning time)

By Karen Brettell

NEW YORK/LONDON, July 2 (Reuters) - The dollar tumbled on

Thursday after the closely watched employment report for June

showed that employers added fewer jobs than economists had

expected last month, while the Japanese yen gained sharply as

traders braced for possible intervention from Japanese

authorities.

Employers added 57,000 jobs, below economists expectations

for 110,000 job gains. Unemployment slipped to 4.2%, from 4.3%.

Fed funds futures traders are now pricing in 49% odds of a

Federal Reserve rate hike by September, down from 67% before the

data.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

was last down 0.71% at 100.68, with the euro up 0.68% at

$1.1453.

Against the Japanese yen, the dollar weakened 1.09%

to 160.78.