MARKETS-FOREX (UPDATE 7) * Dollar rises vs yen on US consumer data * Euro eases as U.S. data, technicals limit gains * Japan's PM warns on public debt, default risks (Updates prices, adds comment, adds U.S. data) By Steven C. Johnson NEW YORK, June 11 (Reuters) - The dollar rose against the yen on Friday as data showing an improvement in U.S. consumer sentiment in June offset weaker-than-expected May retail sales, reassuring some investors about state of the economy. The euro was little changed, snapping a three-day winning streak against the dollar as lingering euro zone debt worries and options-related selling stalled its rally above $1.21. While recent economic data has suggested a steady U.S. recovery, Friday's reports painted a mixed picture when it comes to consumer spending and confidence, and that kept currency moves fairly modest. "The (consumer) numbers are good, but we had a pretty bad report earlier on retail sales, which were very disappointing," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington. Having climbed more than 15 percent against the euro so far this year, Salvaggio said better news and the housing and labor fronts will be necessary for the dollar to add to gains. For more on data, see [ID:nN11114277] and [ID:nN11121462] The dollar was last up 0.4 percent at 91.70 yen , while the euro was flat at $1.2113 Traders said the euro's mini-rally this week hit technical resistance in the $1.2150-55 area earlier. It's decline in May and early June accelerated when it fell below this area and bottomed out at $1.1876 this week, its lowest since early 2006. The euro was up 0.5 percent at 111.09 yen . The yen was more sensitive to market risk appetite, traders aid, than to a warning from Japan's new prime minister, who warned Friday that the country could risk default if it neglects its growing public debt and loses the market's trust. [ID:nTKF106969]. EURO DEBT WOES STILL LINGERING Analysts still expect the Federal Reserve to hike U.S. interest rates before counterparts in Japan and Europe, and that should help the dollar in the months ahead. RBS Securities strategist Alan Ruskin said the gain in consumer sentiment was "quite a pleasant surprise...with no sign of any hit from recent equity weakness or volatility." Some market participants said a successful auction of Italian bonds had helped bolster the euro earlier following strong demand at a Spanish auction on Thursday. Despite the euro's sell-off this week it is poised to end 1.5 percent higher against the dollar, which would be its best weekly performance this year. It has shed 1.5 percent on the month and more than 15 percent this year, driven by fiscal concerns in the euro zone. Many in the market expect the euro will stay under selling pressure in the longer term on concerns that debt problems in some euro zone countries are spreading. (Additional reporting by Vivianne Rodrigues in New York and Naomi Tajitsu in London; Editing by Chizu Nomiyama)

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