* Market thinks Fed will not begin QE just yet but cautious
* Intervention fear keeps yen buying in check
* Australian dollar near 2-year peak ahead of RBA minutes
By Hideyuki Sano
TOKYO, Sept 21 (Reuters) - The dollar hovered near a five-week low against a basket of currencies on Tuesday with traders cautious ahead of a Federal Reserve policy meeting that may discuss the need for further easing.
Few traders expect the Fed to apply another dose of quantitative easing just yet -- and the dollar could gain if that view proves correct -- but the central bank is expected to signal its readiness to make such an action if needed.
The dollar hugged a tight range against the yen as traders were wary of pushing the dollar too much lower after Japan intervened in the market last week for the first time in six years.
The dollar index eased slightly to 81.28 from 81.33 in late U.S. trade and near a five-week low of 80.865 hit last week.
The dollar stood little changed at 85.68 yen, not far from its post-intervention high of 85.94 hit on Friday.
But more dollar selling by Japanese exporters is expected towards 86 yen level before the end of September, when many Japanese exporters close their books.
In terms of technicals, the dollar/yen's 55-day moving average, now around 85.85, has been a resistance point after Japan stepped into the market last Wednesday. It has another resitance point at around 86.26, where its daily ichimoku cloud lurks on charts.
"Share prices are rising, so there's no strong reason to buy the yen at the moment. But on the other hand, there will be yen buying on any dips (by Japanese exporters)," said a trader at a major Japanese bank.
The S&P 500 closed at a four-month high on Monday.
The euro fetched $1.3063, about 1 cent below its five-week high around $1.3160 hit on Friday, as renewed worries over some euro zone countries debt spooked investors.
Irish government bonds' yield spreads over German Bunds rose to euro lifetime highs on Monday ahead of a bond sale on Tuesday, while supply pressures also pushed Portuguese spreads to new highs.
Against the yen, the common European currency was around 112 yen, about 1 yen below its five-week high near 113 yen hit on Friday.
The Australian dollar stayed close to its two-year high of $0.9495 hit on Monday after Reserve Bank of Australia Governor Glenn Stevens suggested Australian interest rates would rise further.
The Australian currency traded at $0.9460 ahead of minutes of the RBA's September policy meeting due at 0130 GMT.
"As long as the minutes are in line with the upbeat tone from Stevens yesterday, the Aussie's price action could be limited given it has already gained so much yesterday," said an analyst at Japanese money broker. (Editing by Michael Watson)