* Dollar holds near 3-month high vs yen
* Euro firms but stays under pressure on Trichet comments
* Investors eye global stock prices, Nikkei drops 2.6 pct
By Rika Otsuka
TOKYO, Feb 24 (Reuters) - The dollar steadied on Tuesday, hovering near a three-month high against the yen on expectations the U.S. government will stay more proactive than other nations in fighting the financial crisis.
The U.S. Treasury Department, Federal Reserve and three other federal agencies jointly said on Monday that they will initiate a programme on Wednesday to assess large U.S. banks' capital needs and determine whether a bigger buffer is warranted.
"Players in the forex market believe the U.S. government is taking very aggressive steps to tackle bank problems," said Hideki Amikura, deputy general manager of forex trading at Nomura Trust and Banking. "That is helping the dollar."
The dollar also received a boost on Monday after the Wall Street Journal reported the government could take a stake of up to 40 percent in Citigroup by converting preferred stock into common shares.
Currency moves were muted, however, as investors wanted to assess the implications of a sharp fall in global share prices before taking positions aggressively, traders said.
Tokyo's Nikkei share average fell 2.6 percent in morning trade, in sight of a 26-year trough below 7,000, after Wall Street slumped to a 12-year low overnight.
Investors also awaited further developments with Citigroup and with American International Group Inc.
AIG, which was rescued twice last year by the U.S. government, is in talks with authorities for more aid as it looks to post its largest-ever quarterly loss, a source familiar with the matter said on Monday.
The dollar was little changed against the Japanese currency from late U.S. trade at 94.61 yen, holding close to a three-month high of 94.95 yen hit on trading platform EBS on Monday.
The U.S. currency fell as low as 94.26 in early Asian trade as some investors booked profits after the previous day's rally. Players were concerned that a plunge in the Nikkei could further damage portfolios of Japanese institutional investors, likely prompting them to dump more overseas assets.
The euro was up 0.1 percent at $1.2709, but well below a 12-day peak of $1.2992 hit on EBS the previous day.
Traders say few were willing to chase the euro higher as European Central Bank President Jean-Claude Trichet said on Monday the euro-zone financial system is under severe strain.
"With worries about countries surrounding the euro zone lingering, the euro continues to be vulnerable, while a ECB rate cut is pretty much priced in the market," said Shuichi Kanehira, senior vice president of the forex division at Mizuho Corporate Bank.
The European single currency firmed 0.1 percent to 120.20 yen, still well off a one-month peak of 121.92 yen reached the previous day.
Investors expect the ECB to lower interest rates in March from the current 2.0 percent.
(Reporting by Rika Otsuka; Editing by Brent Kininmont)