* Dollar at 1-month high vs yen as worries about Syria ease * EZ and China mfg PMI also helps support risk sentiment * Mkt focus on U.S. jobs report, ECB, BoE decisions this week By Anooja Debnath LONDON, Sept 2 (Reuters) - The dollar traded near a one-month high against the yen on Monday as diminishing worries about a military strike against Syria reduced demand for the safe-haven Japanese currency. The dollar was up 1.1 percent at 99.25 yen, having hit 99.435 yen earlier which was its highest since Aug. 2. The euro rose 1.1 percent to 131.14 yen. The yen, which tends to benefit during market turmoil, was recently buoyed as investors avoided risk on escalating tensions around Syria and dumped emerging market assets as they braced for the Federal Reserve to begin scaling back stimulus. But the delay in the possible strike against Syria after U.S. President Barack Obama decided to seek congressional approval, thus opening the risk that Congress will not support such action, has reduced market tension and demand for the safety of the yen. Commodity currencies, like the Australian dollar were better bid thanks to encouraging Chinese data showing factory activity expanded at the fastest pace in more than a year in August. The Aussie was up 1.2 percent at $0.9006. "We see an improvement in investor risk sentiment on Syria. Also the China PMI data is a key driver as it is helping ease investor pessimism over the China growth outlook," said Lee Hardman, currency economist at Bank of Tokyo Mitsubishi. "All this is encouraging some renewed risk seeking behaviour by investors this week," he said adding that he expects the dollar to test the 100 yen level in coming sessions. Strategists said the yen was also weighed down by Japan's decision last week to hike sales tax after members of a special advisory board said such a move would not hurt the economy if coupled with other stimulus. "Backing of the sales tax paves the way for a continuous easing of monetary policy by the Bank of Japan. This is hurting the yen," said Arne Lohmann Rasmussen, head of FX research at Danske Bank. The latest Commodity Futures Trading Commission data showed currency speculators increased their bets in favour of the dollar and were bullish on the euro. The euro was steady at $1.3215 against the dollar. Euro zone survey data released on Monday indicated that factory activity rose at its fastest pace in more than two years in August. U.S. markets were closed on Monday for Labor Day but analysts said that after that currency moves will likely be dictated by the barrage of economic data this week, like Friday's U.S. jobs report, before which the European Central Bank and the Bank of England hold policy meetings. Despite the myriad of upcoming events, it all boils down to the timing and pace of Fed tapering, said DailyFX strategist David Rodriguez. "A strong upward revision to U.S. economic growth estimates and sharp rises in U.S. Treasury yields suggest the so-called 'Septaper' is on track. But price action around major economic events has been erratic, and a big non-farm payrolls disappointment could derail the nascent U.S. dollar recovery."

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