Rotate on the Y-Axis

To rotate on the Y-axis:

Move the cursor over the Y-axis on the Rotate tool.
Hold down the left mouse button and drag right - the object rotates on the Y-axis in the positive direction.
Drag left and the object rotates on the Y-axis in the negative direction.

Hold down Shift to constrain the rotate increments to 45 degree intervals when rotating the object.