* Pace of U.S. job losses slows, boosts recovery hopes * Dollar hits highest versus yen since mid-June * Dollar also gains on euro, reversing recent trend * Markets pricing in tighter Fed policy by mid-2010 (Updates prices, adds detail) By Steven C. Johnson NEW YORK, Aug 7 (Reuters) - The dollar vaulted higher on Friday as data showed the pace of U.S. job losses slowed last month, adding to recent evidence that the health of the world's largest economy is starting to improve. The U.S. currency rose more than 2 percent against the yen to its best level since June and its biggest daily gain against Japan's currency in two months. Crucially, it also surged against the euro, bucking a recent trend in which the dollar tended to fall on good news as investors shunned it for higher-yield, higher-risk currencies and assets such as commodities and stocks. Friday's data showing employers cut 247,000 jobs in July -- far fewer than the 467,000 positions lost in June -- added to a batch of strong data that suggested the U.S. economy will recover before other economies do, eventually leading to higher interest rates and boosting the value of dollar assets.

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