* Yen wavers, dollar stuck near six-week lows

* Oil retreats below $80 a barrel but uncertainties loom

* Traders await US payroll data for Fed clues

By Jiaxing Li

HONG KONG, Aug 6 (Reuters) - Currency markets drifted on

Thursday with the yen struggling to retain intervention gains

and the dollar pinned near six-week lows, as concerns about a

proposed U.S.-Iran deal and jitters about upcoming U.S. payroll

data left traders cautious.

The yen was little changed at 157.71 per dollar in

early trade after weakening for two straight sessions. It has

now given back some intervention gains after touching 155.20 per

dollar on Monday, but remains well off last month's multi-decade

low of about 164.

The euro was little changed at $1.1557, and sterling

traded flat at $1.3469. The New Zealand dollar

and the Australian dollar were also flat, last trading

at $0.5885 and $0.7056, respectively.

The dollar index, which tracks the U.S. currency

against six major peers, was little changed at 99.65, struggling

to find direction while hovering near a six-week low.

Markets remained watchful as tensions continued to play out

in the Gulf after Reuters reported a proposed deal between Iran

and Oman to help end the U.S.-Iran conflict could give Tehran

control over inbound traffic through the Strait of Hormuz.

There was no immediate U.S. comment on the proposal.

President Donald Trump has said a deal to reopen the strait was

imminent, but U.S. officials have repeatedly insisted they would

never agree to Iran controlling access to the world's most

important trade route for energy supplies.

Brent crude futures fell 0.5% to $79.08 a barrel on

Thursday, near the levels last seen when the U.S. and Iran

signed an interim peace agreement in June.

"The market's very much in sort of watch and wait mode," Ray

Attrill, head of FX strategy at National Australia Bank, said in

a podcast.

"We haven't got the oil market volatility that has really

been the key driver of most markets in recent days and weeks,"

he said, adding that markets were waiting to see whether a deal

would be struck at all.

CENTRAL BANKS IN FOCUS

Bank of Japan policymakers debated mounting price risks that

likely required more rate hikes even as they raised borrowing

costs to a 31-year high in June, minutes of the meeting showed

on Wednesday.

That highlights growing attention within the board to

broadening price pressures, further bolstering the case for

another rate hike as soon as September.

Fuelled by interventions from Tokyo and coordinated action

with Washington in recent days, the yen rallied as much as 5%

against the dollar but was struggling to retain the gains.

In a recent Reuters poll, nearly 95% of the respondents said

future Japanese currency interventions alone would not

sustainably curb the currency's weakness. Nearly every

respondent who said that also said the BOJ would have to raise

interest rates to make a lasting impact.

Investors are now also awaiting U.S. payroll data that could

provide more clues on the Federal Reserve's interest rate path,

after data showed the country's services sector stayed strong in

July even as input costs rose, but services-sector employment

slowed.

A Reuters survey of economists expected July's employment

report on Friday to show nonfarm payrolls increased

by 80,000 jobs in July after rising 57,000 in June. The

unemployment rate is forecast to hold steady at

4.2%.

Fed Governor Lisa Cook said on Wednesday that she was open

to the idea that the central bank may need to raise its

short-term interest rate target to deal with "too high" levels

of inflation in the U.S. economy.