* Dollar awaits U.S. data, with particular focus on retail sales

* U.S. yields' rise after Fed Rosengren's comments prop up USD

* Aussie remains on defensive, on track to lose 1 pct this week (Adds details, quotes)

By Shinichi Saoshiro

TOKYO, May 13 (Reuters) - The dollar held to gains against the yen and euro on Friday, awaiting U.S. data later in the day that could set the greenback's tone.

The dollar was little changed at 108.86 yen after gaining about 0.6 percent overnight.

The U.S. currency, which had hit an 18-month low of 105.55 yen last week after the Bank of Japan stood pat on monetary policy, was on track to rise 1.8 percent on the week. Verbal warnings by Japanese authorities over the past week have so far helped cool the yen's rally.

The euro was effectively flat at $1.1371 after shedding 0.4 percent on Thursday.

The dollar was buoyed overnight as U.S. Treasury yields rose when Boston Federal Reserve President Eric Rosengren said the Fed should raise interest rates if data confirms a stronger jobs market and inflation outlook in the second quarter. He added that the markets are too pessimistic on the economy.

The currency market will have a chance to gauge the underlying strength of the U.S. economy through a batch of data to be released later in the day.

"In terms of impact on the dollar, April retail sales data will be key, especially since a high rise is expected. The University of Michigan consumer sentiment index also bears watching," said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo.

The April U.S. producer price index (PPI) is also due later in the day.

The dollar could face renewed pressure against peers like the yen if U.S. economic indicators fall short of expectations, which would be a new potential headache for Japanese authorities who have managed to arrest the yen's appreciation by threatening to intervene.

"Japanese officials can keep up their verbal warnings and even actually intervene, but the fundamentals continue pointing towards a stronger yen - a view many speculators appear to have embraced," said Junichi Ishikawa, forex analyst at IG Securities in Tokyo.

"Japan's current account surplus continues to increase and U.S. rate hike expectations for the year have been cut down from four to one. Furthermore, currency policy will likely become a topic in the U.S. presidential elections, making it hard for Japan to intervene," he added, listing the factors favouring a strong yen.

Japan's current account surplus was largest since 2007 in March due to falling oil import costs and a hefty income surplus from overseas investment, Ministry of Finance data showed on Thursday.