UPDATE 1-Japan warns against excessive FX moves as yen firm

(For more stories on the Japanese economy, click [ID:nECONJP])

* Finmin Noda says giving utmost attention to forex moves

* BOJ seen on hold but eyeing yen, may act if moves sharp (Adds details, analyst quote)

By Rie Ishiguro and Leika Kihara

TOKYO, Aug 9 (Reuters) - Japanese Finance Minister Yoshihiko Noda on Monday repeated a warning that excessive currency moves were undesirable, as expectations of further U.S. monetary easing edge the yen towards a 15-year high against the dollar.

The dollar has bounced back to around 85.40 yen JPY= after hitting an eight-month trough of 85.02 yen on Friday, but traders say it has room to fall again on expectations the Federal Reserve could ease monetary policy further even as early as this week.

"Excessive, disorderly foreign exchange moves would have adverse effects on the stability of the economy," Noda told reporters. "We will give our utmost attention to forex moves."

Global stocks and the dollar fell on Friday after disappointing U.S. payrolls data for July signalled the recovery in the world's biggest economy was losing traction.

The subsequent yen rise poses a headache for Japanese policy makers because it hurts Japan's fragile, export-reliant economy and may slow its escape from grinding deflation.

As long as the yen's climb is a gradual one, the Bank of Japan is likely to stand pat on policy this week and stick to its view that the economy is on track for a moderate recovery.

But it is closely watching market moves and may consider easing policy further if the yen soars towards an all-time high against the dollar at a pace fast enough to damage business sentiment. [ID:nTOE67701N]

"With the dollar on the verge of falling below 85 yen, the BOJ will come under pressure from markets to ease further in the next few weeks," said Junko Nishioka, chief Japan economist at RBS Securities.

"It is unlikely to move at its meeting this week but may tweak the wording in its statement to include a cautious view on markets."

The BOJ will announce the outcome of its two-day policy meeting on Tuesday.

Analysts say the chance of Japan intervening in the currency market to curb yen rises is small, given it would have difficulty convincing its Group of Seven counterparts of the need to act when the country's economy is recovering.

That may put the onus on the BOJ although with interest rates already near zero, the central bank does not have many effective policy options left to support the economy.

Japanese bank lending fell 1.8 percent in July from a year earlier, marking the eighth straight month of declines, a sign the abundant cash pumped out by the BOJ is not reaching broad sectors of the economy.

Japan's economy likely slowed considerably in the April-June second quarter after expanding an annualised 5 percent in the first quarter, a Reuters poll showed, as export growth moderated and a boost to consumer spending from government incentives faded. [ID:nTOE671050]

(Editing by Charlotte Cooper)