By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The dollar dropped on Monday after rising 10 straight days as investors consolidated gains after the election of a Republican president who is expected to adopt fiscal policies that will lead to interest rate increases.

Reports of an earthquake in Japan weighed on the dollar against the safe-haven yen and boosted the euro and other currencies. The single euro zone currency rose to session highs after the earthquake news,

Late on Monday, the Japan Meteorological Agency said an earthquake with a preliminary magnitude of 7.3 hit northern Japan, and it issued tsunami advisories for much of the nation's northern Pacific coast.

An earthquake in 2011 in Japan resulted in nearly a 7 percent appreciation of the yen for the first few days after the quake on the expectation of increased repatriation flows.

In late trading, the dollar fell from six-month highs against the yen to trade 0.1 percent lower at 110.80 yen <JPY=>.

Given a shortened trading week because of the U.S. Thanksgiving Day holiday on Thursday, analysts said, there is little on the horizon that could change expectations that the Federal Reserve will raise interest rates in December, a action considered supportive of the dollar.

The greenback's weakness on Monday though benefited the euro, which rose from an 11-month low last Friday. Recent political developments have eased the uncertainty surrounding next year's European elections in countries such as Germany.

Shaun Osborne, chief currency strategist at Scotiabank in Toronto, said the dollar's slide was just a correction or, at the very least, a consolidation. He remained upbeat on the dollar's medium-term outlook because of rising rates amid expectations of stronger U.S. growth.

The dollar index last traded down 0.3 percent at 100.90 <.DXY>. Over the last 10 days, it has risen nearly 5 percent, with investors betting increased fiscal spending by the incoming Donald Trump administration will stoke inflation and propel interest rates higher.

That said, Scott Smith, director of hedging solutions at Cambridge Global Payments in Toronto noted that Fed Chair Janet Yellen in testimony to Congress last week struck a cautious tone on the U.S. economy. The Fed, he added, was seemingly in no rush to factor in the likelihood of increased fiscal stimulus into its economic models.

This poses a risk to the market's bullish bias on the dollar, he added.

Meanwhile, analysts said German Chancellor Angela Merkel's announcement on Sunday that she will seek a fourth term, while not a surprise, is viewed as euro-positive. Merkel is seen as a defender of liberal democracy in the West at a time investors are fretting about a wave of populism and anti-globalization in Europe.

The euro rose 0.2 percent to $1.0601 <EUR=> in late trading, after touching its lowest since December 2015 on Friday.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Steve Orlofsky)