* Dollar/yen climbs more than 1 pct to near 2-wk high
* Dollar gains broadly, traders trim short positions
* Sterling suffers after BoE report
(Updates prices, adds detail)
By Naomi Tajitsu
LONDON, Sept 21 (Reuters) - The dollar rose broadly on Monday, hitting a near two-week high against the yen, as traders trimmed short positions in the U.S. currency following broad losses so far this month.
Against the yen, the dollar rose more than a full percent, after speculative flows pushed it higher in quiet trade in Asia, where markets in Japan, Singapore and other centres were closed for holidays.
In the absence of economic events or data, traders took profits on currencies which have rallied against the dollar, including the euro, up more than 2 percent so far this month.
Analysts said some investors were becoming concerned that short dollar positions were overstretched, suggesting that a near-term correction may be in store.
"There's already a lot of long euro/dollar positions in the market so it's difficult to push the pair higher," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.
Data from the Commodity Futures Trading Commission showed that currency speculators last week raised short dollar positions -- essentially bets that the U.S. currency will depreciate -- to their highest since March 2008 [ID:nN18595453].
By 1102 GMT, the dollar
Traders said Japanese exporters had placed sell orders above 92.50 yen, which may cap any dollar/yen rally until Tokyo markets reopen on Thursday.
The euro
Against a currency basket <.DXY>, the dollar rose 0.5 percent to 76.824, off a one-year low of 76.01 hit last week.
The pound hit a five-month low against the euro after the Bank of England said the pound's long-run sustainable exchange rate may have fallen due to an increased focus on Britain's economic imbalances. [nLAG003763].
The euro
Against the dollar
The dollar also got a leg up from waning risk appetite which saw the pan-European FTSEurofirst 300 index <.FTEU3> fall below the 1,000 mark and retreat further from an 11-month ahead on worries the market may have run ahead of economic fundamentals.
U.S. stock futures indexes were down 0.5 percent.
FED AWAITED
Investors awaited a policy decision from the Federal Reserve on Wednesday, and some analysts said optimism about the U.S. economy's recovery prospects may boost the dollar further.
Federal Reserve Chairman Ben Bernanke last week said the recession was "very likely" over, although he noted that any recovery would be slow.
Stronger-than-expected U.S. economic data in recent months has spurred speculation the Fed may raise interest rates from zero in the near future, but many analysts believe more time is required before such a move.
Some said dollar selling may pick up if the Fed reinforces the view that rates will stay pat for the coming months.
"A clear message that policy is on hold is likely (on Wednesday), which will certainly temper dollar buying on the back of any changes to the quantitative easing timetable," analysts at BTM UFJ said in a research note.
Markets also awaited a summit of G20 leaders in Pittsburgh later this week, which analysts said was seen as holding potential risks to the FX market even though currencies were not expected to be formally discussed.
The meeting comes as U.S. President Barak Obama has said he will push the leaders for a reshaping of the global economy, while trade tensions between Washington and Beijing heat up and European leaders keep up pressure to curb salaries and bonuses paid to bankers.
(Additional reporting by Emelia Sithole-Matarise)