* Japanese PM says BoJ should keep ultra-loose monetary policy

* Euro up after ECB opens door to heftier September rate rise

* Sterling gains after hawkish comment from BoE official

By Gertrude Chavez-Dreyfuss and Samuel Indyk

NEW YORK/LONDON June 21 (Reuters) - The Japanese yen plunged against the U.S. dollar on Tuesday to its lowest since October 1998, as the Bank of Japan's ultra-loose monetary policy was in stark contrast to an aggressive Federal Reserve determined to stamp out soaring inflation.

The yen dropped to a new 24-year low of 136.455 per dollar JPY=EBS , extending losses which have already seen it shed more than 18% of its value versus the greenback this year.

Colin Asher, senior economist at Mizuho said yen moves appeared mainly flow-driven.

"The dollar broke through the old high at 135.60 yen and triggered stops taking it through the big figure at 136.0 and beyond," Asher noted.

"The rationale is the same as last week and the week before and the week before: The BoJ will be the last of the G10 to hike, the Fed is accelerating the pace, and (there is) a wider yield spread," he added.

The yen lost more ground after the BoJ on Friday dashed any expectations of a change in policy and continued to stand alone among other major central banks in its commitment to ultra-easy monetary settings.

Instead it has been ramping up bond-buying to hold 10-year yields in a targeted 0% to 0.25% range. But despite its efforts, the yield remains at the upper end of that target JP10YT=RR

Earlier in the day, Japanese Prime Minister Fumio Kishida effectively gave the green light to sell yen when he said the BoJ should maintain its ultra-loose monetary policy.

By afternoon trading, the yen was at 136.20 yen per U.S. dollar, just off the earlier 24-year low. The yen was also down 1.3% at 143.78 per euro, its lowest since June 9 EURJPY=EBS .

The yen has lost more than any other major currency against the greenback, as the BoJ's dovish policy stance diverged from the general hawkishness among global policymakers.

In other currencies, the dollar index was little changed at 104.41 =USD , but it was supported overall by expectations of hefty rate increases at the upcoming Fed meetings.

Richmond Fed President Thomas Barkin added to the U.S. central bank's hawkish rhetoric on Tuesday, saying that Fed Chair Jerome Powell's guidance of a 50 or 75 basis points rate hike in July is "reasonable."

Earlier, the dollar slipped after data showed U.S. existing home sales tumbled to a two-year low in May as prices jumped to a record high and mortgage rates increased further, pushing out entry-level buyers from the market.

The euro, on the other hand, was firmer at $1.0529 EUR=EBS , up 0.2%. It rose after European Central Bank chief economist Philip Lane said the ECB will raise rates by 25 basis points at its July meeting, but the size of its September hike is still to be decided, suggesting a larger 50 basis points hike is possible.

Sterling also rose against the dollar, up 0.4% at $1.2290 GBP=D3 on hawkish comments from Bank of England policymakers.

BoE chief economist Huw Pill said on Tuesday the central bank would need to raise rates further to tackle surging inflation.

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Currency bid prices at 3:02PM (1902 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

104.4000

104.4400

-0.02%

9.133%

+104.5300 +103.9300 Euro/Dollar

EUR=EBS

$1.0533

$1.0510

+0.22%

-7.34%

+$1.0583

+$1.0509 Dollar/Yen

JPY=EBS

136.5450

135.0600

+1.10%

+18.61%

+136.6150 +134.9400 Euro/Yen

EURJPY=

143.83

141.97

+1.31%

+10.35%

+143.8900 +141.9600 Dollar/Swiss

CHF=EBS

0.9662

0.9677

-0.14%

+5.94%

+0.9683

+0.9632 Sterling/Dollar GBP=D3

$1.2279

$1.2248

+0.26%

-9.20%

+$1.2324

+$1.2243 Dollar/Canadian CAD=D3

1.2920

1.2981

-0.47%

+2.18%

+1.2985

+1.2907 Aussie/Dollar

AUD=D3

$0.6976

$0.6954

+0.31%

-4.04%

+$0.6994

+$0.6935 Euro/Swiss

EURCHF=

1.0177

1.0168

+0.09%

-1.85%

+1.0216

+1.0167 Euro/Sterling

EURGBP=

0.8578

0.8579

-0.01%

+2.10%

+0.8610

+0.8569 NZ

NZD=D3

$0.6335

$0.6330

+0.09%

-7.43%

+$0.6363

+$0.6318 Dollar/Dollar

Dollar/Norway

NOK=D3

9.8480

9.8920

-0.35%

+11.89%

+9.9015

+9.7770 Euro/Norway

EURNOK=

10.3764

10.4119

-0.34%

+3.63%

+10.4236

+10.3170 Dollar/Sweden

SEK=

10.0960

10.1052

+0.05%

+11.96%

+10.1297

+10.0380 Euro/Sweden

EURSEK=

10.6355

10.6304

+0.05%

+3.92%

+10.6591

+10.6180

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Falling yen Link

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Reporting by Samuel Indyk in London and Gertrude Chavez-Dreyfuss in New York; Additional reporting by
Sujata Rao in London; Editing by Jonathan Oatis