* Dollar/yen regains some ground after Wednesday's fall
* Short-covering supports dollar/yen -traders
* Japanese academic says BOJ likely to ease in June or July (Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, May 12 (Reuters) - The dollar rose against the yen on Thursday due to position squaring, getting an added lift after a Japanese academic said the Bank of Japan was likely to expand its monetary stimulus as soon as next month.
The dollar edged up 0.5 percent to 108.97 yen JPY= . On Wednesday, the dollar had lost steam after touching a two-week high of 109.38 yen and ended up falling 0.8 percent.
Some traders who sold the dollar in its recent bounce seemed to be buying it back now, said a trader for a Japanese bank in Singapore.
The dollar added to its gains versus the yen after Takatoshi Ito said the BOJ is likely to expand monetary stimulus either in June or July. Ito is a prominent academic with close ties to Bank of Japan Governor Haruhiko Kuroda. his part, Kuroda said the BOJ won't hesitate to take further easing steps if necessary, adding that there were still large downside risks to Japan's economy. dollar had set an 18-month low of 105.55 yen on May 3, having slid after the BOJ held off from expanding its monetary stimulus at its policy meeting in late April.
The greenback has since regained some footing as traders cut their bullish bets on the yen following a series of warnings from Japanese Finance Minister Taro Aso that the government would intervene to curb any excessive one-sided gains.
But analysts believe Japan will be wary of intervening before it hosts a Group of Seven meeting this month, even though Tokyo is clearly unhappy with the yen's rise of more than 10 percent so far this year.
"For dollar/yen it would appear that it is now caught in nervous range trade around 105 to 110," said Heng Koon How, senior currency strategist for Credit Suisse (SIX:CSGN) Private Banking Asia Pacific.
"It is likely that Tokyo is still trying to build consensus and agreement on intervention both internationally and domestically," Heng said.
Against a basket of six major currencies, the dollar edged up 0.1 percent to 93.898 .DXY , but remained below Tuesday's high at 94.356, which represented a 2.7 percent recovery from its 16-month trough hit earlier in the month.
The euro held steady at $1.1424 EUR= .
While the dollar has been supported by a recovery in risk appetite in financial markets, doubts linger over the strength of the global economy with political risks in many places seen as hampering companies' investment plans.
"It is not clear how strong the U.S. economy will be in the April-June quarter. It will be better than the first quarter but it doesn't look so strong," said Makoto Noji, senior strategist at SMBC Nikko Securities.
U.S. economic growth slowed to 0.5 percent in the first quarter, with the strength of the dollar late last year seen as a factor weighing on the economy. That has also supported expectations that the Fed may delay rate increases this year, further hampering dollar bulls.
Sterling remains on the defensive as the latest surveys show the "Brexit" referendum on Britain's continued membership in the European Union on June 23 is still too close to call.
The Bank of England's monetary policy committee releases updated growth and inflation forecasts in a quarterly report on Thursday but uncertainty over Brexit is likely to keep the central bank extra cautious. pound held steady at $1.4443 GBP=D4 , not far from its two-week low of $1.4375 touched on Monday.