FOREX-Dollar holds firm in cautious trading before Fed meets

    * Yen hovers at nine-month lows, euro flat
    * Focus on Fed comments about higher bond yields
    * Sterling dips ahead of BoE meeting on Thursday
    * Graphic: World FX rates

 (Adds analyst comments; updates prices)
    By Kevin Buckland and Sagarika Jaisinghani
    TOKYO, March 16 (Reuters) - The U.S. dollar clung to small
gains on Tuesday as caution reigned in currency markets ahead of
major central bank meetings, beginning with a two-day Federal
Reserve gathering due to start later in the global day.
    The greenback hovered just off its highest since June versus
the yen and cemented a position around $1.19 per euro
 in muted trading.
    The firmer tone for the dollar came despite a retreat in
U.S. benchmark yields from the highest levels in more than a
year ahead of the Fed meeting.
    Expectations are running low for monetary policymakers to
shift from their accommodative stance despite forecasts of rapid
economic growth in the wake of an accelerating COVID-19 vaccine
roll-out and a $1.9 trillion pandemic relief package.

    Investors will pore over whatever the Fed has to say about
the run-up in yields, which have risen on bets that economic
growth and inflation could prompt a faster-than-expected
normalisation of monetary policy.
    "It's a very pivotal meeting from that perspective," said
Mayank Mishra, an FX strategist at Standard Chartered Bank in
    "The other thing that is being awaited is any decision on
the supplemental leverage ratio (SLR) exemption. We don't expect
any explicit push back on back-end yields, but an extension of
the SLR can offer some relief to the market."
    The SLR exemption, a regulatory break that allows big banks
to exclude reserve deposits and Treasuries from capital ratios,
is due to expire on March 31.
    The dollar was little changed at 109.170 yen after rising to
a nine-month high of 109.365 on Monday. The Bank of Japan begins
a two-day policy meeting on Thursday, along with an extensive
policy review.
    The euro was largely flat at $1.19330, languishing below
$1.20 since March 5. Europe's vaccine roll-out has been hampered
by the suspension of AstraZeneca shots in Germany,
France and other nations amid concerns about possible serious
side effects.
    Sterling fell about 0.2% to $1.3871 ahead of a Bank
of England meeting on Thursday, where the central bank is
expected to keep its benchmark interest rate at its historic low
of 0.1% and its bond-buying programme unchanged.
    The dollar's index against six major currencies was flat at
91.798 after rising nearly 0.2% on Monday.
    The Australian dollar, viewed widely as a liquid
proxy for risk appetite, and the New Zealand dollar were
little changed against the U.S. dollar. The commodity-linked
currencies are on course to post their fourth straight quarterly
gain as commodity prices rebound on bets of economic growth.
    Bitcoin, meanwhile, slipped to $54,198.64 following its jump
to a record $61,781.83 on Saturday.
    Currency bid prices at 0400 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.1934        $1.1929     +0.04%         -2.32%      +1.1937     +1.1923
 Dollar/Yen                   109.1550       109.1200    +0.06%         +5.71%      +109.2400   +109.1900
 Euro/Yen                     130.26         130.16      +0.08%         +2.63%      +130.3900   +130.1400
 Dollar/Swiss                 0.9266         0.9275      -0.10%         +4.74%      +0.9279     +0.9266
 Sterling/Dollar              1.3869         1.3900      -0.21%         +1.53%      +1.3903     +1.3867
 Dollar/Canadian              1.2478         1.2473      +0.05%         -2.00%      +1.2487     +1.2468
 Aussie/Dollar                0.7752         0.7756      -0.05%         +0.77%      +0.7755     +0.7742
 NZ                           0.7195         0.7200      +0.00%         +0.26%      +0.7205     +0.7195
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ   

 (Reporting by Kevin Buckland in Tokyo and Sagarika Jaisinghani
in Bengaluru; Editing by Christopher Cushing & Simon