* Dollar index rebounding from nearly three-year low
    * Biden has promised "trillions" in extra spending
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

    By Kevin Buckland
    TOKYO, Jan 12 (Reuters) - The dollar held four days of gains
against major peers on Tuesday as the prospect of massive fiscal
stimulus pushed U.S. yields higher.
    President-elect Joe Biden, who takes office on Jan. 20 with
his Democratic party in control of both Houses, has promised
"trillions" in extra pandemic-relief spending.
    The dollar index has rebounded from a nearly
three-year low reached last week as the benchmark 10-year U.S.
Treasury yield topped 1% for the first time since
March and rose as high as 1.148% overnight. 
    The support from rising yields has so far trumped worries
that the extra spending would increase debt levels and trigger
faster inflation, which ordinarily would make the greenback less
attractive.
    Many analysts expect the U.S. currency to resume the decline
that saw the dollar index lose close to 7% in 2020 as expanded
stimulus and vaccine rollouts brighten the global economic
outlook. Investors tend to buy the dollar when they are looking
for safer investments.
    The dollar index was little changed at 90.578 in Asian
trading, having risen as high as 90.73 overnight for the first
time since Dec. 21. It dipped to 89.206 on Jan. 6, a level not
seen since March 2018.
    "It's complicated because higher U.S. yields are giving the
dollar a bounce, but stimulus could support U.S. equities, and
the dollar would remain weak," said Osamu Takashima, head of G10
FX strategy at Citigroup Global Markets Japan in Tokyo.
    "In the medium-term, we remain bearish on the dollar. Dollar
assets look expensive."
    Speculators in the FX market are extremely bearish on the
dollar, U.S. Commodity Futures Trading Commission data released
on Friday showed.
    The greenback added 0.1% to 104.305 yen, after
rising to a one-month high of 104.40 on Monday.
    The euro was largely steady at $1.21425 after
slipping to $1.21320 in the previous session for the first time
since Dec. 21.
    Currency markets mostly shrugged off a Democratic push to
impeach President Donald Trump following last week's siege of
the Capitol.
    "We do not expect U.S. political theatre to be a major
driver of the USD," Commonwealth Bank of Australia currency
analyst Joe Capurso wrote in a client note.
    "Market participants are looking to the policies of the
Biden presidency rather than the dying days of the Trump
presidency."
    "Given the USD is modestly overvalued, we expect the recent
lift in the USD to be limited," he added.
    Meanwhile, China's yuan edged up against the dollar on
demand for cash ahead of next month's Lunar New Year
holiday.
    Onshore spot yuan opened at 6.4770 per dollar and
was changing hands at 6.4712 at midday, 81 pips stronger than
the previous late session close. 
    Bitcoin was trading at $35,186 as its red-hot
rally has faltered since it soared to an all-time high of
$42,000 on Jan. 8.
    
========================================================
    Currency bid prices at 2:39PM (539 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2146        $1.2150     -0.03%         -0.59%      +1.2162     +1.2139
 Dollar/Yen                   104.2650       104.1500    +0.12%         +0.96%      +104.3120   +104.1300
 Euro/Yen                     126.64         126.67      -0.02%         -0.22%      +126.7700   +126.5800
 Dollar/Swiss                 0.8911         0.8904      +0.11%         +0.75%      +0.8916     +0.8897
 Sterling/Dollar              1.3532         1.3515      +0.13%         -0.94%      +1.3532     +1.3509
 Dollar/Canadian              1.2770         1.2786      -0.07%         +0.34%      +1.2789     +1.2772
 Aussie/Dollar                0.7696         0.7695      +0.03%         +0.06%      +0.7710     +0.7687
 NZ                           0.7167         0.7160      +0.11%         -0.18%      +0.7175     +0.7159
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 




 (Reporting by Kevin Buckland; Editing by Sam Holmes and Ana
Nicolaci da Costa)
  



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