The yen dipped against the dollar on Thursday as jitters about whether Japanese authorities would take new steps to rein in the yen's rise left investors reluctant to chase it higher.

Investors are watching to see if the central bank will take more monetary easing steps -- such as expanding liquidity -- ahead of a meeting between Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa expected on Monday.

The euro also came under pressure on renewed concerns about the health of countries on the euro zone periphery as a report on the website of German magazine Der Spiegel said austerity steps to fix Greece's debt were harming the economy.

The yen slipped as rumors circulated earlier the Bank of Japan would hold an emergency policy meeting. Although sources later said this was unlikely, market jitters kept the yen away from 15-year highs versus the dollar.

There was a lot of speculation about whether the BoJ would hold an emergency meeting. It didn't happen but there is still tension and nervousness about what action the BoJ could take, said Niels Christensen, currency strategist at Nordea in Copenhagen.

The euro is a little softer and renewed concern about sovereign debt is once again hurting the currency after the article in Der Spiegel. He added that the euro remained within its recent range against the dollar as the news flow provided no clear direction.

At 0756 GMT (3:56 a.m. EDT), the dollar rose 0.4 percent to 85.78 yen, pulling away from a 15-year low of 84.72 yen hit on trading platform EBS last week.

The euro fell 0.4 percent to $1.2789, hovering just above support at the 100-day moving average around $1.2776. Traders see rises capped around $1.2900 as the single currency has struggled to sustain moves above that level over the last week.

Against the yen, the euro fell 0.15 percent to 109.62 yen, but stayed off a seven-week low of 109.07 yen hit on EBS earlier this week.

MORE BOJ MEASURES?

The Sankei newspaper said on Thursday the BOJ has started considering additional monetary easing steps in line with government efforts to support the country's economy.

The most likely option is expanding the BOJ's fund-supply tool put in place in December, it said, without citing sources. The central bank may either expand the fund supply volume to 30 trillion yen ($352 billion) from 20 trillion yen, or extend the duration of cheap, fixed-rate loans to banks to six months from three months, it said.

Analysts said such measures may have limited effect in weakening the yen.

These measures are widely anticipated and in terms of timing these measures will be implemented later than the market expected. Ultimately, the current account balance ... is not likely to increase, analysts at Barclays said in a note to clients.

Most, however, do not expect Japanese authorities will intervene directly to weaken the yen unless the dollar falls closer to the 80.00 yen mark.

Japanese investors bought a net 2.18 trillion yen ($25.6 billion) of foreign debt in the week of August 8-14, the largest volume of purchases since the finance ministry started to gather its weekly capital flows data in January 2005.

A source familiar with the data said Japanese banks have been aggressively buying overseas debt, boosting the net buying figure. But banks' hefty purchases of foreign bonds are not seen helping to rein in recent gains in the yen because banks hedge against foreign exchange volatility when they buy bonds abroad or raise funds overseas to finance their purchases.

Banks' buying of U.S. government debt is likely to have contributed to a fall in Treasury yields and to have been more of a negative factor for dollar/yen, some analysts say.

(Additional reporting by Kaori Kaneko in Tokyo)

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