* Dollar/yen stays on defensive, hits fresh 18-month low

* Aussie holds firm ahead of RBA decision later on Tuesday

* Dollar index touches lowest since January 2015 (Updates prices, adds comments)

By Masayuki Kitano

SINGAPORE, May 3 (Reuters) - The dollar set a fresh 18-month low versus the yen on Tuesday, as the yen rose in a holiday-thinned market, while the Australian dollar held firm ahead of an interest rate decision from Australia's central bank.

The dollar last traded at 106.21 yen, down 0.2 percent on the day. The greenback fell to as low as 106.05 yen at one point, its lowest level since October 2014.

"It's a continuation, it's a weak dollar theme and yen seems to be the leader," said Jesper Bargmann, head of trading for Nordea Bank in Singapore.

The yen's rise occurred in thin trading conditions with Japanese markets closed from Tuesday to Thursday for public holidays.

The yen added to its recent gains, having jumped about 5 percent against the dollar last week as the Bank of Japan held off from expanding its monetary stimulus - the yen's biggest weekly gain since 2008.

The yen also rose this week after the U.S. Treasury put Japan on a new currency monitoring list on Friday along with four other countries that have large trade surpluses with the United States.

The U.S. Treasury listing was seen as making it harder for Japan to intervene in the currency market to stem the yen's gains.

One factor that may help to temper the dollar's decline against the yen in the short-term is market positioning, with traders already having built up bearish bets against the dollar, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

Okagawa said any respite for the dollar was likely to be temporary, however, adding that the greenback still seemed to be stuck in a downtrend versus the yen.

The dollar inched down against a basket of six major currencies, slipping to a low of 92.461 at one point on Tuesday, its lowest level since January 2015.

The greenback has been on the defensive because the U.S. Federal Reserve is seen in no hurry to raise interest rates. The dollar index has fallen about 6.2 percent so far this year.

The euro hit its strongest level since last August at $1.1543. The euro last stood near $1.1539, steady on the day.

The Australian dollar rose 0.4 percent to $0.7697, holding firm ahead of an interest rate decision from the Reserve Bank of Australia later on Tuesday.

While a majority of economists polled by Reuters expect no rate move, a growing number are forecasting a cut following some soft inflation numbers.

(Reporting by Masayuki Kitano; Editing by Eric Meijer)