FOREX-Dollar steady, underpinned by Fed tapering expectations
* BOJ begins 2-day meeting; expected to maintain policy
* Yen comes down off intraday spike marked after minor Japan earthquake
* Aussie jumps after Australia Q2 GDP report
TOKYO, Sept 4 (Reuters) - - The dollar steadied against major rivals in Asian trading on Wednesday, with the dollar index sticking close to a six-week peak after U.S. data on Tuesday reinforced expectations that the U.S. Federal Reserve will begin reducing its stimulus soon. Caution ahead of this week's central bank meetings as well as the possibility of a U.S. military strike on Syria were likely to keep major currency pairs in recent ranges, market participants said. The dollar index , tracking performance against a basket of six major currencies, last traded at 82.382, up slightly on the day. It rose to 82.516 on Tuesday, its highest since July 22. The dollar was buying 99.58 yen, nearly flat on the day after hitting a one-month high of 99.86 yen on Tuesday and gaining more than 1 percent on Monday. The yen spiked to an intraday high of 99.41 yen against the dollar after a moderate earthquake shook Tokyo dealing rooms in the morning but it quickly erased its gains. There were no immediate reports of injuries or damage and no tsunami warning was issued after the magnitude 6.5 tremblor, centred about 580 km (360 miles) south of Tokyo. Data on Tuesday showed the U.S. manufacturing sector grew last month at its fastest pace in more than two years, while construction spending rose in July. The data provided more evidence to support market expectations that the Fed will begin tapering its stimulus at its policy meeting on Sept. 17-18, unless U.S. payroll numbers due on Friday fall short of forecasts. Economists polled by Reuters estimated U.S. payrolls expanded by 180,000 jobs in August while the unemployment rate remained steady at 7.4 percent. The Bank of Japan began its two-day meeting on Wednesday. It was expected to maintain a massive monetary stimulus it launched in April that will nearly double the monetary base to 270 trillion yen by the end of 2014 to achieve a 2 percent inflation target. The BOJ will consider further monetary easing if Prime Minister Shinzo Abe decides to raise the sales tax as planned to 8 percent from 5 percent in April, the Asahi newspaper reported on Wednesday, citing several sources. Japanese Finance Minister Taro Aso said on Tuesday that Japan will tell G20 nations at a summit this week that it will proceed with a planned two-stage sales tax hike, and consider compiling an extra budget for fiscal spending to ease the pain on the economy. "I think the BOJ would like to take new actions, to give some expectations to the market, but the Japanese economy remains steady, so for now, they will not act," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. "Everyone is cautious about Syria, which is keeping dollar/yen in a range for now. Action there could weigh on the dollar, so nobody wants to make big moves now," he added. President Barack Obama won the backing of key figures in the U.S. Congress, including top Republicans, in his call for limited U.S. strikes on Syria to punish President Bashar al-Assad for his suspected use of chemical weapons against civilians. Central banks in the euro zone, the UK and Canada will also meet this week. The euro stayed near Tuesday's low of $1.3173, its lowest since late July, and was last slightly lower at $1.3165.
The Australian dollar jumped after data showing Australia's second quarter gross domestic product rose 0.6 percent in the second quarter from the previous quarter, when it rose 0.5 percent. That was enough to send the local unit higher as there had been fears the report would be much weaker. The Aussie hit an intraday high of $0.9103 and was last trading at $0.9097, up 0.4 percent, moving away from August's three-year low around $0.8848. Resistance was said to lie at the 55-day moving average around $0.9114. The pair last closed above that average on April 30, when it was trading around $1.0350. The GDP data provided scant sign of any recovery in business investment, justifying the Reserve Bank of Australia's recent move to cut its cash rate to a record low 2.5 percent and keep the door open to more easing. The RBA held rates steady on Tuesday.