* Euro hovers near 6-month high versus dollar
* Market awaits Fed minutes due later on Wednesday
* Dollar edges higher vs yen in thin trade
* Aussie and kiwi remain under pressure
By Masayuki Kitano and Lisa Twaronite
SINGAPORE/TOKYO, Aug 21 (Reuters) - The dollar edged higher versus the yen, but hovered near a six-month low against the euro on Wednesday as investors awaited minutes of the U.S. Federal Reserve's latest meeting for clues on its policy outlook.
Speculation that the U.S. central bank is poised to begin tapering its $85 billion a month in asset purchases as early as September is generally positive for the dollar, as it tends to lift U.S. Treasury yields. But it can also pressure equities and increase the appeal of perceived safe-haven currencies, such as the yen and Swiss franc.
"We expect the minutes of the July FOMC meeting to show that committee members viewed the improvement in labour markets and reduced downside risk as sufficient to signal that many on the committee stand ready to reduce the pace of purchases in September, should current trends continue," strategists at Barclays wrote in a note to clients.
"Overall, we expect the minutes to maintain the bifurcated message of recent Fed communications: sounding hawkish on tapering and dovish on rate hikes," they said.
The minutes of the Fed's July meeting are due to be released later on Wednesday.
The dollar rose 0.3 percent versus the yen to about 97.56 yen, edging away from a one-week low of 96.91 yen set on Tuesday on trading platform EBS.
Traders said the yen took its cues from moves in Japan's benchmark Nikkei share average. The dollar touched an intraday high of 97.68 yen in the Asian afternoon as the Nikkei pulled away from an intraday trough, which was its lowest since late June.
Stop-loss dollar-buying at levels above 97.60 yen also helped give the greenback some lift, said Jeffrey Halley, FX trader for Saxo Capital Markets in Singapore.
"Volumes have been incredibly light last few hours so not a lot is needed to move it around," Halley said.
The yen has been inversely correlated to moves in Tokyo shares in recent months, and currency traders have been looking to Japanese equities for direction hints on the yen.
The euro was steady at about $1.3415. On Tuesday, the euro had set a six-month high of $1.3453 as the yield premium that 10-year U.S. Treasury notes offer over German Bunds narrowed.
The 10-year U.S. Treasury yield has come down from a two-year high of 2.90 percent set on Monday, as market expectations that the Fed may soon start scaling back its monetary stimulus roiled emerging markets and added a safe haven bid to U.S. debt.
"I think that the overall move higher in the euro lacks conviction, especially given that the ECB has provided dovish forward guidance," said Sim Moh Siong, FX strategist for Bank of Singapore.
At its policy meeting in early August, the European Central Bank (ECB) had left interest rates at a record low of 0.5 percent and affirmed that they will remain there for some while to come and could yet fall further.
In addition, if the strength in the euro were to hurt euro zone exports and the economy and put an end to upside surprises in European data, that could then dent the single currency, Bank of Singapore's Sim said.
The Australian and New Zealand dollars fell, dented by weakness in Asian equities.
The New Zealand dollar edged down 0.4 percent to $0.7933 , having fallen more than 1 percent in the previous session after the Reserve Bank of New Zealand announced home lending restrictions and said the kiwi dollar was overvalued.
The Australian dollar slipped 0.5 percent to $0.9029 , dented by weakness in Asian equities. The Australian dollar was again being sold by investors as a hedge against weakness in Asian markets.