* Dollar hits 17-month low vs yen of 109.85 yen
* Japan PM: countries should avoid "arbitrary intervention"
* Govt spokesman says watching market closely
* Euro edges lower vs dollar
* Traders await Fed March meeting minutes (Updates prices, adds comments; changes byline, dateline, pvs LONDON)
By Sam Forgione
NEW YORK, April 6 (Reuters) - The U.S. dollar hit a fresh 17-month trough against the yen on Wednesday on doubts that the Bank of Japan would intervene to halt the yen's appreciation, while the euro inched lower against the dollar ahead of Federal Reserve meeting minutes.
The dollar fell below 110 yen for a second straight day and hit 109.85 yen, its lowest level since late October 2014, after Japanese Prime Minister Shinzo Abe told the Wall Street Journal that countries should avoid seeking to weaken their currencies with "arbitrary intervention." dollar regained ground and last traded down 0.28 percent at the 110 yen level. The dollar has fallen more than 8 percent against the yen so far this year, partly on a more dovish Fed.
"The bar to (BoJ) intervention is pretty high," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
Japan's chief government spokesman followed Abe's comments by saying that Tokyo was watching the currency market closely and would respond "as appropriate". But bankers believe Japan is hamstrung in what it can do in the run-up to G7 meetings in May.
The euro edged lower against the dollar, partly on uncertainty ahead of the release of the Fed's March meeting minutes at 2 p.m. ET (1600 GMT).
Some analysts said the minutes could strike a less dovish tone than Fed Chair Janet Yellen struck last week, while others said the minutes would not be consequential since Yellen's dovish view remained paramount.
"The view is that the minutes are probably going to just end up being less dovish than Yellen, hence why you're seeing a little bit of dollar buying," said Richard Cochinos, head of European G10 FX strategy in London.
The euro last traded down 0.1 percent at $1.1372, down from a session high of $1.1400 hit earlier. Against the Swiss franc, the dollar was last up 0.13 percent at 0.9571 franc CHF= .
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.07 percent at 94.711 .DXY .
On Wall Street, the benchmark S&P 500 .SPX stock index was last up 0.45 percent.