By Alun John

HONG KONG (Reuters) - The dollar was near a four-and-a-half-year top against the yen on Tuesday, after Federal Reserve Chair Jerome Powell was reappointed for a second term, emboldening bets on higher U.S. interest rates.

At 114.8 yen the greenback is near last week's peak of 114.97, its highest since March 2017, having jumped 0.77% on Monday.

The Japanese currency is sensitive to moves in U.S. Treasury notes and two-year U.S. Treasury yields rose 8.5 basis points on Monday to their highest since early March 2020. They last yielded 0.5924%.

U.S. President Joe Biden chose Powell over the other leading candidate Lael Brainard, whom markets consider to be the more dovish of the two, though Brainard will be Fed vice chair.

The news reinforced market expectations of rate rises next year when the central bank finishes tapering its emergency bond buying programme.

Currency markets have been mostly driven by market perceptions of the different paces at which global central banks reduce pandemic era stimulus and raise rates.

"Chair Powell’s nomination for a second term will leave markets comfortable pricing in Fed lift-off from July next year," said analysts at Westpac in a note. "At least three Fed officials have now openly discussed speeding up tapering too."

"Meanwhile, virus suppression measures are being implemented in Europe again, making for a stark contrast," they added.

The euro languished at $1.124, around a 16-month low, having lost 2.8% so far this month.

The common currency has been hurt by the dovish tone coming out from the European Central Bank and more recently a resurgence in COVID-19 cases in Europe, which forced Austria back into a full lockdown on Monday and caused Germany to consider tighter restrictions.

Sterling was also soft versus the rampant dollar with one pound at $1.340.

The strong dollar and slightly softer oil prices weighed on commodity currencies.

The Australian dollar, which has also been dragged by perceptions of a dovish Reserve Bank of Australia, was at $0.7228, near its lowest since early October.

The Canadian dollar continued this month's slide. The dollar has gained 2.5% on the loonie in November and one dollar was last at 1.2692.

Bitcoin was stuck in the doldrums at $56,784 having struggled after hitting a record high of $69,000 earlier this month.

"Many traders will be watching to see if it falls as low as $52,000, which is expected to be a price level where the market leading cryptocurrency finds buyers," said analysts at cryptoexchange OKEX in a note.