CORRECTED-FOREX-Yen hovers near recent lows; investors eye Syria, Fed
(Corrects to say UK jobs data in the second paragraph)
* Yen falls to 3-1/2-month low versus euro, four-year low versus sterling
* Obama speech reduces chances of U.S. strike against Syria
* Fed meeting in focus as markets await stimulus trim
By Wanfeng Zhou
NEW YORK, Sept 11 (Reuters) - The yen hovered near recent lows on Wednesday as easing tensions over Syria dented demand for the safe-haven Japanese currency, while uncertainty about the Federal Reserve's stimulus plan kept the dollar range-bound.
The yen hit a seven-week low against the dollar and a 3-1/2-month trough versus the euro, before recovering losses. It also fell to a four-year low against the British pound, which rallied after U.K. jobs data.
U.S. President Barack Obama pledged on Tuesday to explore a diplomatic plan from Russia to take away Syria's chemical weapons, although he voiced scepticism about it and urged Americans to support his threat to use military force if needed.
Traders said uncertainty about Syria and the Fed could keep major currencies in a range. The U.S. central bank meets next Tuesday and Wednesday and investors will look for details on the pace and timing of the central bank's plans to scale back its bond buying program.
"Until we can get through that meeting and see what the Fed says, we're expecting continued consolidation here," said Eric Viloria, currency strategist at Forex.com.
The dollar was last down 0.2 percent at 100.17 yen, not far from a session peak of 100.60 yen, according to Reuters data, which was the strongest since July 22. Analysts said the dollar would likely hold above the 100 yen level in coming sessions.
A string of solid data out of China this week, which reinforced expectations that the world's No. 2 economy is stabilizing after slowing for more than two years, also pressured the yen as investors' appetite for riskier assets increased.
The euro was down 0.2 percent at 132.93 yen, having hit a an intra-day peak of 133.36 yen, its highest since May 22. Sterling rose 0.2 percent to 158.13 yen.
"It is a combination of things... tensions in Syria, which had been negative for risk-assets and supported the yen, have eased a bit. Also global economic data over the last couple of weeks has been relatively good," said Paul Robson, currency strategist at RBS Global Banking.
The euro was little changed at $1.3267, while the dollar index, a measure of the greenback versus six major currencies, slipped 0.1 percent to 81.745.
Although the U.S. jobs report last Friday fell short of market expectations, many investors expect the Fed to start reducing its bond-buying programme at next week's policy meeting, underpinning the dollar.
"Markets are positioned for the Fed to taper... any attempt to reduce stimulus from the current $85-billion-per-month will probably be done modestly," said Niels Christensen, FX strategist at Nordea.
A Reuters poll on Monday showed economists expect the Fed to announce a moderate reduction to its $85 billion monthly asset-buying program by some $10 billion.
Better-than-expected economic data and improving market sentiment has helped the single currency lately, but analysts at Morgan Stanley warned the euro's strength could be short-lived and they remain sellers on any rallies.
"A break above the August high of (around) $1.3450 is unlikely, and we would look to sell around the $1.3320 level," they wrote to clients. (Additional reporting by Anooja Debnath in London; Editing by Chris Reese)
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