* Dollar posts biggest one-day gain in over a month vs yen

* Aussie dollar drops more than one U.S. cent

* U.S. data mixed, consumer spending disappoints

By Ian Chua

SYDNEY, March 31 (Reuters) – The dollar was firmer against most of its peers early on Tuesday, having posted its biggest one-day rally in over a month against the yen and notching up solid gains on its Australian counterpart.

Traders pointed to a variety of reasons including month-end and quarter-end flows that helped underpin the greenback.

The dollar fetched 120.15 yen, well off Monday’s trough of 119.105. The bounce offered hope that its recent slide from a near eight-year peak of 122.04 to 118.33 might have run its course for now.

“The rally looks impressive, and given the general USD bid tone that has re-emerged it would be tempting to think that the only way is up now for USDJPY,” CitiFX analysts wrote in a note to clients.

“However, turnover was unimpressive and USDJPY is hovering right around the 50 percent retracement level of the recent fall. Given the way it has frequently disappointed recently, it may have done enough for now.”

The greenback firmed only modestly against the euro, which last stood at $ 1.0823, down from Monday’s high of $ 1.0900. Recent failed attempts to break above $ 1.1000 have frustrated those trying to push up the euro.

As a result, the dollar index climbed to 98.070, pulling further away from a low of 96.170 set last week after a dovish steer from the Federal Reserve unsettled dollar bulls.

Among the worst performing major currencies overnight was the Australian dollar, which skidded more than one U.S. cent to as low as $ 0.7633. It last stood at $ 0.7650, back near a six-year trough of $ 0.7561 set earlier in the month.

Persistent weakness in commodity prices, worries about slower Chinese growth and expectations of interest rate cuts at home have conspired to knock the Aussie lower.

In contrast, U.S. data on Monday provided a more benign backdrop for the greenback. An industry report showed a pick up in home sales, while a measure of core inflation quickened to 1.4 percent, from 1.3 percent, in the 12 months through February.

“This should reassure the Fed that recent low headline inflation readings are the result of transitory energy price declines and that inflation is likely to rise toward the Fed’s target over time,” said John Ryding, chief economist at RDQ Economics in New York.

Disappointingly, U.S. consumer spending barely rose in February, the latest sign that a harsh winter had slowed the economy in the first quarter. Still, many investors are betting the economy would bounce back smartly.

(Editing by Chris Reese)