* Dlr/yen defensive after sinking by as much as 1.5 pct overnight

* U.S. ADP private employment report next in focus

By Shinichi Saoshiro

TOKYO, June 2 (Reuters) - The yen sat on top of large gains against its peers early on Thursday after surging on risk aversion and disappointment over lack of clear policy guidance by Japan following a decision to delay a consumption tax hike.

The dollar was steady at 109.480 yen, having slid from a high of 110.830 overnight as a big drop in Tokyo stocks fuelled bids for the safe-haven currency.

The greenback, which had soared to a one-month high of 111.455 yen on Monday on expectations for an early U.S. rate hike, also took a big knock after Japanese Prime Minister Shinzo Abe announced on Wednesday that he was delaying a sales tax hike by two and a half years.

"There are three factors behind the dollar/yen tumble. First was the deterioration in risk appetite. The second was that the dollar was vulnerable after having risen too sharply," said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo.

"Lastly, some participants appeared let down that the prime minister did not accompany the tax hike delay announcement with clear stimulus plans."

The euro lost 0.6 percent versus the yen on Wednesday and last traded at 122.50, while the Australian dollar retreated 0.7 percent against the yen overnight.

Worries about whether Britain will vote to stay in the European Union or not later this month also buoyed the yen, although the Japanese currency did give back some its big gains against the dollar late Wednesday on the stronger-than-expected Institute for Supply Management (ISM) U.S. factory activity numbers.

The dollar will await the U.S. May ADP private employment report due later in the day for potential relief, with the report often seen providing clues to the all-important non-farm payrolls data scheduled for release on Friday.

The euro was steady at $ 1.1185 after gaining 0.5 percent overnight.

The market will keep an eye on the European Central Bank's policy meeting later in the session, although few expect the gathering to result in fireworks as the central bank is widely anticipated to stand pat on monetary policy.

The Australian dollar dipped 0.1 percent to $0.7250 , losing a some steam after rising sharply to a two-week high of $0.7300 the previous day on stronger-than-expected local first quarter GDP data.