FOREX-Dollar hits 7-week high vs yen as BOJ eases, payrolls eyed

* Dollar on track for winning week vs yen, euro

* Investors await U.S. June jobs report later on Friday

* U.S. employers expected to have added 179,000 jobs in June

* ECB likely to move cautiously on stimulus reduction-minutes

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

LONDON, July 7 (Reuters) - The dollar hit a seven-week high against the yen on Friday after the Bank of Japan increased its purchases of government bonds, expanding monetary policy at a time when other major central banks are moving towards tightening.

With the biggest data set-piece of the month -- the U.S. non-farm payrolls report -- due at 1230 GMT, most currencies traded in tight ranges.

The yen was the outlier, with the dollar gaining over half a percent against the Japanese currency to hit 113.835 yen, its strongest since May 16.

The BOJ said it would buy an unlimited amount of bonds, as it sought to put a lid on domestic interest rates pushed higher by the broad sell-off in developed market bonds.

"(T)heyve said theyre going to stick to their yield target and they proved today thats what theyll actually do," said Commerzbank currency strategist Esther Reichelt, in Frankfurt.

"But the market seems to be speculating increasingly that central banks will change their monetary policy to become more restrictive, and there was even some speculation that...maybe the BOJ would also turn to this path."

The dollar edged up on Friday against its broad index and was on track for weekly gains, though investors were unlikely to push the upside significantly as they braced for the labor market data, following some downbeat jobs figures overnight.

Economists polled by Reuters expect U.S. employers to have added 179,000 jobs last month, above May's relatively small gain of 138,000.

The dollar was bolstered by higher U.S. Treasury yields which rose even after the uninspiring jobs and service sector data, amid concerns that the U.S. Federal Reserve will begin unwinding its bond holdings sometime this year.

Minutes from the Fed's June meeting released on Wednesday showed that some policymakers wanted to announce the beginning of the central bank's reduction of its massive debt portfolio by the end of August, but others wanted to wait until later in the year.

The euro was flat at $1.1420, not far from 14-month highs of $1.1445 touched last week.

European Central Bank policymakers are open to a further step towards reducing their monetary stimulus but are likely to move slowly out of fear of causing market turmoil, minutes of their last meeting showed on Thursday.

Faster economic recovery in the euro zone is giving the ECB room to pare its extraordinary stimulus measures, Bundesbank President Jens Weidmann said on Thursday.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.bi z / c m s / ? p a g e I d = l i v e m a r k e t s (Additional reporting by Lisa Twaronite in Tokyo Editing by Jeremy Gaunt)