* Japan exporters tiptoe into market to sell dollar
* Market looking to comments from U.S. Treasury's Geithner
* Japan PM Kan says will take decisive steps as needed
By Hideyuki Sano
TOKYO, Sept 16 (Reuters) - The yen crept higher but remained under pressure on Thursday with the market on the alert for more intervention by Japanese authorities after a massive yen-selling campaign the previous day caught many off guard.
Dealers said the Bank of Japan spent $20 billion or more worth of yen on Wednesday to weaken the currency against the greenback, which staged its biggest daily gain against the yen in almost two years.
Japanese Prime Minister Naoto Kan reiterated on Thursday that Japan would take decisive steps on yen rises if needed, Jiji news agency reported.
The dollar traded at 85.50 yen, down about 0.3 percent from late U.S. levels on sporadic sales from Japanese exporters. But it has not strayed far from Wednesday's high of 85.78 yen hit on electronic trading platform EBS.
The U.S. currency rose more than 3 percent on Wednesday from a 15-year low of 82.87 yen struck just before Tokyo stepped into the market.
Traders have said Japanese exporters wanted to sell the dollar above 85 yen before their half-year book-closing at the end of September, which helped to drive the yen's relentless rise before the intervention. Some may now eye a higher level to sell.
"Looking at the dollar's surge yesterday, some Japanese exporters may want to wait a bit more before they sell the dollar," said Teppei Ino, analyst at Bank of Mitsubishi-Tokyo UFJ.
POSITIONS BUILDING UP
There seems to be some build-up of long dollar/yen positions as traders speculate that more yen-selling intervention may be in the offing, said a trader at a major Japanese bank.
Institutional investors may hold back from selling the dollar against the yen in anticipation of a further rebound in the dollar, said Kimihiko Tomita, the head of forex at State Street Global Markets.
"According to our data, institutional investors have started to close their yen-short/dollar-long positions since mid-August, which I think has helped to accelerate the yen's rise. Intervention could make those investors think twice about closing their positions," he said.
Yet the dollar faces many resitance levels on the upside as well, starting with its 20-day upper Bollinger Band around 85.80. Another resistance level is seen around 86.30, where the bottom of an Ichimoku cloud sits on Thursday.
The market will be looking to U.S. Treasury Secretary Tim Geithner's testimony before the Senate Banking Committee at 1400 GMT as Japan's intervention could have complicated his efforts to persuade China to let the yuan appreciate.
Any criticism from Geithner on Japanese intervention could spark speculation that Japan may scale back its activity, dealers said.
On Wednesday, U.S. lawmaker Sander Levin, who chairs the U.S. congressional committee examining China's currency policy, described Japan's intervention as "deeply disturbing".
Geithner will tell lawmakers in prepared testimony that China's yuan currency has risen too slowly and he is examining what tools may be needed to persuade Beijing to move faster.
The euro traded at 111.05 yen, down about 0.5 percent on the day and off a one-month high of 111.63 yen struck on Wednesday. (Editing by Edmund Klamann)