* Dollar rebound seen limited on prospect for low rate policy
* Upside for euro/dollar heavy above $1.5000
* Dollar/yen above 6-week low, but downward risks seen
* Dollar short-positions being closed in holiday week
By Kaori Kaneko
TOKYO, Nov 24 (Reuters) - The dollar trimmed losses on Tuesday as Tokyo stocks failed to follow up a stronger day on Wall Street, prompting some to buy the dollar back, and as some investors closed dollar short-positions before the Thanksgiving holiday.
Tokyo markets were playing catch-up after a three-day weekend, which saw comments from a senior Federal Reserve official reinforce the widely-held view that the United States will stick to its low interest rate policy for a while, adding to downward pressure on the dollar.
But the euro was supported by remarks from European Central Bank President Jean-Claude Trichet who said on Monday that as the economic situation becomes more normal, the focus in the medium term calls for a "gradual and timely" phasing out of quantitative measures.
The yen crosses slipped as the Japanese currency found buyers out of Tokyo after the three-day weekend, but trade is expected to be thin and price moves were likely to be exaggerated ahead of the U.S. Thanksgiving holiday on Thursday, dealers said.
"With a holiday shortened-week this week, there are still investors who want to close their dollar-short positions," said Yuji Saito, head of the FX sales department at Societe Generale.
The dollar index, a gauge of its performance against six major currencies, rose 0.2 percent at 75.235, above a 15-month low of 74.679 touched last week.
St. Louis Federal Reserve President James Bullard said on Sunday the Federal Reserve should keep alive its mortgage-related assets purchase programme beyond a planned end-date to stimulate the economy.
The euro was down 0.1 percent at $1.4940, after rising as high as $1.5000 on trading platform EBS on Monday.
"The euro could rise further given comments from ECB President Trichet, but the upside for the euro is likely to be heavy and it will struggle to rise well above $1.5000," Saito said.
ECB executive board member Jose Manuel Gonzalez-Paramo said on Sunday the central bank could detail plans for phasing out its quantitative easing at the December meeting.
The dollar edged down 0.1 percent to 88.88 yen, having touched a six-week low of 88.57 yen on EBS the previous day.
The Australian dollar was at $0.9211 but the level is still below a 15-month high of $0.9407 struck last week.
The New Zealand dollar was trading at $0.7291, having risen over 1 percent on Monday.
Traders are also focused on revised U.S. gross domestic product for the third quarter and housing market data due later on Tuesday.
The U.S. Treasury will offer $42 billion in five-year notes on Tuesday after decent results for a $44 billion auction of two-year notes on Monday. (Reporting by Kaori Kaneko; Editing by Edwina Gibbs) ((kaori.kaneko@thomsonreuters.com; Reuters Messaging: kaori.kaneko.reuters.com@reuters.net; +81-3-6441-1983)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))