* Higher yielders firm after Fed says rates to stay low
* Dollar/yen steady, Japan investor repatriation moves eyed
By Kaori Kaneko
TOKYO, Aug 13 (Reuters) - The dollar slipped on Thursday after the Federal Reserve painted a less gloomy outlook for the U.S. economy but also said rates would remain low for a while, an assessment that led investors to return to commodity-linked currencies.
The Fed said it would slow the pace at which it buys Treasuries by extending the duration, but not the size, of its $300 billion programme to buy long-term government securities.
The U.S. central bank kept interest rates near zero and said they would likely stay there for an extended period, which dealers said scaled back market speculation that the Fed might raise rates soon.
"The Fed move basically did not have enough impact to alter the market trend of funds flowing into riskier assets," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking.
"The prospect that the Fed will keep rates low will likely be one factor causing dollar weakness in the long term," he said.
Primary dealers polled by Reuters do not expect the Fed to raise rates until 2010 at the earliest, with four banks seeing a hike in the first half and seven in the second half.
The euro rose 0.3 percent from late U.S. trade on Wednesday to $1.4227.
Higher yielding currencies such as the Australian and New Zealand dollars also rose, extending gains made the previous day after rebounding from steep losses.
The Aussie was up 0.3 percent at $0.8364, having fallen as low as $0.8180 on Wednesday, while the kiwi advanced 0.3 percent to $0.6736.
A trader at a European bank said the market had generally taken the Fed's statement as dovish, which was broadly positive for risk and negative for dollar.
"But equity markets still don't look like they have that much steam behind them so people are cautious about piling into risk trades at the moment," he said.
Asian share markets gained on Thursday but many are still largely unchanged so far in August and remain below recent 2009 peaks. The Aussie and kiwi are also sitting just below their highs for the year scored earlier in the month.
DOLLAR/YEN RANGE
The dollar was steady at 96.08 yen but below last week's eight-week high of 97.79 yen.
Traders said the U.S. currency's upside against the yen seemed to be capped due to talk of Japanese investors repatriating funds related to $27 billion in coupon payments on U.S. Treasuries due on Aug.15. In addition, $61 billion in coupon securities mature on the same day.
Analysts said that while sentiment towards riskier assets had improved there was a general degree of caution on the Fed's move to extend the time frame of asset purchases as it indicated the economy was still vulnerable.
"I guess that leaves its options open just in case the improved economic outlook turns out not be blemish free," said David Watt, a senior currency strategist at RBC Capital. "The Fed is strategically taking a middle road with the BoE on one wing and Norges Bank on the other."
The Bank of England struck a dovish note on Wednesday, saying it might consider cutting the rate it pays on bank reserves in a bid to encourage them to lend more funds. Last week it said it was pumping in an additional 50 billion pounds by buying assets with newly created money.
In contrast, Norway's central bank held rates at a record low but opened the door for increased borrowing costs sooner than expected as the economy continued to recover.
Now the Fed meeting is past, investors are looking to data for trading incentives.
U.S. retail sales for July are due at 1230 GMT and economists in a Reuters survey expect a 0.7 percent rise, a shade stronger than a 0.6 percent rise in June. Excluding automobiles, sales are seen up 0.1 percent compared with a 0.3 percent decline in the prior month.
Weekly U.S. jobless claims for the week ended Aug. 8 also due at 1230 GMT and are forecast to show 545,000 new filings for jobless benefits compared with 550,000 in the previous week. (Additional reporting by Anirban Nag in Sydney and Charlotte Cooper in Tokyo; Editing by Michael Watson)