* Dollar sinks after Fed decision, off lows in early Asia
* Aussie pauses after fresh 28-year high, euro 10-mth peak
* ECB, BoE meeting outcomes next in focus
By Ian Chua and Masayuki Kitano
SYDNEY/TOKYO, Nov 4 (Reuters) - The U.S. dollar was on the back foot on Thursday after the Federal Reserve launched a controversial policy to buy more government debt, hovering near its 2010 low against a basket of currencies and a 28-year trough against the Australian dollar.
The Fed said on Wednesday it would buy $600 billion more in Treasuries by the middle of next year in an attempt to reinvigorate a flagging recovery, slightly more than the $500 billion markets were generally positioned for.
The dollar index, a gauge of the greenback's performance against a basket of currencies, was holding at 76.41 after falling 0.4 percent on Wednesday, just above its 2010 low set in October at 76.144 and trendline support at 76.10.
The euro, which hit 10-month highs at $1.4200 on trading platform EBS after the Fed decision, stood at $1.4121 from around $1.4000 before the announcement.
"Setting aside the immediate reaction in the FX market, we expect that this will ultimately prove to be bearish for the USD against other currencies and against a broad basket of commodities," analysts at JPMorgan said in a note to clients.
Analysts expect investors to take the Fed's commitment to open-ended purchases of Treasuries as a green light to use the dollar as a funding vehicle for carry trades into commodities, emerging markets and higher-yielding currencies.
The dollar softened to 81.02 yen after rising as far as 81.59 on Wednesday.
The all-time low of 79.95 yen was still in focus and traders remained on alert for possible yen-selling intervention by Japanese authorities to weaken its currency.
The Bank of Japan meets on Nov. 4-5, having brought forward its policy review from mid-November to speed up the launch of its 5 trillion yen ($62 billion) asset buying scheme.
Analysts had said the timing of the meeting gave the BOJ the chance to act quickly if the Fed surprised the market and triggered a new wave of dollar selling.
Koji Fukaya, chief currency strategist at Credit Suisse Securities in Tokyo, said he expected the Bank of Japan to stand pat on Friday, however.
He said the dollar could see a correctional bounce ahead of the year-end due to the potential for position unwinding, and was likely to trade in a range between 80 yen to 82 yen as it found support towards the year-end.
The dollar has lost nearly 8.0 percent versus a basket of major currencies since September on expectations that more monetary easing from the Fed would pressure U.S. yields and diminish the return on dollar-denominated assets.
Medium-term U.S. Treasury debt yields fell on views they would benefit most from the Fed bond purchase programme, while 30-year yields jumped in a sharp steepening of the curve.
With the Fed out of the way, there is still plenty this week for markets to chew on.
On Friday, the influential non-farm payrolls data is expected to show the U.S. economy generated 60,000 jobs in October.
Before that however, the European Central Bank meets on Thursday. The ECB is not expected to show any signs of veering off its crisis exit path, but there is an outside chance of more quantitative easing from the Bank of England.
Sterling hit a peak at $1.6180 on Wednesday, highs last seen in late January, before easing back to $1.6093.
"We may be in for a period of consolidation. We've got the ECB and Bank of England meetings tonight, so we'll see how those pan out. In the more medium term, for the dollar to regain a stronger tone, you'll need to see the jobs data," said Grant Turley, strategist at ANZ in Sydney.
The Australian dollar was one of the main beneficiaries of renewed dollar weakness, hitting a post-float high above $1.0060 before pulling back to $1.0031.
"We still favour those (like the Canadian, Australian and New Zealand dollars) where upward pressure on interest rates will increase as downside global economic risks abate," said Kit Juckes, strategist at Societe Generale. (Editing by Charlotte Cooper; Editing by Joseph Radford)