* FOMC on Tues; focus on statement, number of dissenters
* Yen rises ahead of BOJ outcome, traders cut yen shorts
* Uncertainty over Greece persists, weighs on euro
By Satomi Noguchi
TOKYO, March 16 (Reuters) - The dollar fell against the yen
and cut gains versus the euro on Tuesday with some traders
trimming dollar long positions ahead of a Federal Reserve
policy-setting meeting.
The yen gained broadly after investors found no new reason to
sell the currency further after a flurry of media reports that
the Bank of Japan is leaning towards easing steps this week,
prompting them to trim yen short positions, traders said.
The U.S. Fed's Federal Open Market Committee holds a one-day
meeting on Tuesday where it is expected to reiterate its vow to
keep interest rates very low for an "extended period", though one
member dissented at the last meeting and sought to drop that
phase.
Market participants are keen to see if there are any more
dissenters this time after recent economic data showed U.S.
consumers are buying more and firms seem ready to hire again.
"Those who had stretched dollar buying are now trimming those
positions before the Fed outcome. But the dollar's ultimate
reaction to the Fed results will be either steady on an unchanged
statement or a rise if the remarks suggest an upgrade in
outlook," said a senior currency options manager for a Japanese
bank.
"There is little scope for dollar weakness surrounding this
event," the manager said.
The dollar index <=USD> <.DXY>, a gauge of its performance
against six major currencies, dropped 0.1 percent to 80.12, with
near term resistance seen around 80.85, its March 10 high.
Any change in the Fed's language is likely to provide a boost
to the U.S. dollar, but chances of that happening are pretty low,
traders say.
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The euro <EUR=> rose 0.1 percent from late New York trade on
Monday to $1.3690 after having fallen as low as $1.3639 the
previous day.
But the single currency's gains against the dollar were
limited and it stayed under selling pressure versus the yen due
to a lack of progress on a financial aid package for debt-laden
Greece. []
The Japanese currency recovered from three-week lows against
the dollar and the euro ahead of the outcome of a Bank of Japan
meeting on Wednesday, in which it is expected to relax its
already ultra-loose policy to fight deflation.
But the BOJ board appears split and any hesitancy to loosen
policy could lift the yen, traders say. []
Solid near term resistance for the yen is seen around 89.60
levels, the high struck on March 9.
The BOJ ends its two-day meeting on Wednesday and is likely
to announce more easing measures, like boosting the size or
duration of special fund-pumping operations. []
The dollar fell 0.5 percent to 90.06 yen, down 0.5 percent.
Against the yen, the euro <EURJPY=R> fell 0.4 percent to
123.28 yen. Other yen crosses also slipped on investor
profit-taking with the Aussie down 0.4 percent to 82.43 yen
<AUDJPY=R>.
The Australian dollar <AUD=D4> was steady against the dollar
at $0.9152 <AUD=D4> after minutes from the Reserve Bank of
Australia's latest policy meeting showed it expected to keep
hiking rates towards normal levels, though there was nothing on
the timing of future moves. []
(Additional reporting by Anirban Nag in Sydney and Kaori Kaneko
in Tokyo; Editing by Joseph Radford)
