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* BOJ scraps monetary base, targets longterm rates
* Fed seen standing pat, could hint at hike this year
* Sterling extends losses on concerns about Brexit impact
TOKYO, Sept 21 (Reuters) - The yen weakened against the dollar and euro on Wednesday after the Bank of Japan altered its policy framework, and investors bought back the U.S. currency ahead of the outcome of the Federal Reserve's policy meeting later in the session.
Japan's central bank, overhauling its massive stimulus programme, decided to scrap its focus on monetary base and set targets for long-term rates.
The BOJ maintained the 0.1 percent negative interest rate it applies to some of the excess reserves that financial institutions park with the central bank.
But it abandoned its base money target and instead set a "yield curve control," under which it will buy long-term government bonds to keep 10-year bond yields around current levels of zero percent.
"It does give somewhat of an impression of further easing, targeting the 10-year yield at zero and setting a yield curve target," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
"Overall, that does seem like an easing, but we really don't know if it will have the actual impact of an easing on the market, and it will take some time to find out," she said.
The dollar was up 1 percent at 102.68 yen, after rising to a one-week high of 102.79.
"The monetary base was abandoned, which could be supportive for the dollar, overall," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
"Many people expected the BOJ not to take any action at all, and the yen to strengthen, so we now see many people buying the dollar back," he said.
The euro surged 0.7 percent to 114.25 yen after earlier dropping as low as 112.50, its lowest since Aug. 16.
Against the dollar, the European unit was down 0.2 percent at $1.1128.
Japanese data released earlier on Wednesday showed exports fell 9.6 percent in August from a year earlier, posting an 11th straight month of decline.
In addition to the BOJ, investors' attention is also on the Fed. The U.S. central bank is widely expected to hold interest rates unchanged at 0.25 percent to 0.50 percent, and could hint at a rate hike by the end of the year.
Weaker-than-expected U.S. economic data has prompted investors to call off bets for a Fed rate hike on Wednesday.
On Tuesday, data showed U.S. housing starts fell more than expected in August as building activity declined broadly after two straight months of solid increases.
The British pound, which tumbled in the previous session, was down 0.2 percent at $1.2967 after skidding to $1.2946, its lowest since Aug. 16.
The head of Germany's Bundesbank warned on Monday that banks based in Britain could lose "passporting" access to EU markets after Britain's pending exit from the European Union.
Reporting by Lisa Twaronite; Editing by Simon Cameron-Moore