* Dollar up vs major currencies, near highest since Sept. 1
* Yen rises vs dollar on cautious trading
* Market moves limited due to BOJ, Fed meetings
* Sterling falls to lowest vs dollar since Aug. 16
(Recasts first paragraph, updates to U.S. market open, adds
By Dion Rabouin
NEW YORK, Sept 20 The dollar edged up against a
basket of major currencies on Tuesday in light trading as
investors retraced last week's moves ahead of policy meetings
from the Bank of Japan and U.S. Federal Reserve.
Investors see little chance that the Fed raises U.S.
short-term interest rates and expectations are also low that the
BOJ will be able to weaken the yen meaningfully when both banks
announce policy prescriptions on Wednesday. However, traders
remained cautious on the outcome of the meetings.
"To a large extent I think the market is just paring back
its expectations," said Richard Cochinos, head of European G10
FX strategy at Citigroup in London.
"A week and a half ago consensus was dollar/yen higher on
BOJ inaction. Now we're seeing a flattening of the risk profile
as we go into the central bank meetings and traders are not
trying to be too aggressive on one side or the other."
The yen rose 0.25 percent against the dollar to trade at
101.70 yen, having earlier touched a one-week high at
101.55 yen. The Japanese currency has risen almost 20 percent
versus the dollar over the past 12 months despite the Japanese
central bank's best efforts to weaken it.
The dollar index rose 0.1 percent to 95.934, hovering
just below the 96.108 mark touched on Friday that was the
highest since Sept. 1. The dollar has fallen against the six
major currencies that make up its basket in three of the past
four sessions, but had its largest one-day percentage gain since
late July on Friday.
Esther Reichelt, a currency strategist at Commerzbank
Frankfurt, said she expected a quiet day, though thin trading
could lead to some exaggerated moves not driven by fundamental
"Everybody is just waiting for the BOJ and the Fed. Why do
anything today?" she said. "Everyone has already positioned for
these events and there is no new information that could give
them a reason to reposition, so I expect a rather calm day."
The dollar got its biggest boost on Tuesday from selling of
the British pound, which dipped 0.5 percent to its lowest
against the greenback since Aug. 16 on worries about the
political and economic risks from Britain's pending exit from
the European Union.
The head of Germany's Bundesbank warned on Monday that banks
based in Britain could lose "passporting" access to EU markets
(Reporting by Dion Rabouin; Additional reporting by Jemimia
Kelly in London; Editing by Dan Grebler)