* ADP data reinforces expectations for solid US payrolls report
* BOE expected to cut rates, and could muster additional measures
* Yen's strength attracts attention of Japan's MOF
TOKYO, Aug 4 (Reuters) - The dollar stood tall in early Asian trading on Thursday on the back of a stronger-than-expected U.S. employment data, while sterling remained in a tight range ahead of the Bank of England's expected interest rate cut later in the session.
The dollar index, which tracks the greenback against a basket of six major rivals, was nearly flat at 95.553 .DXY , holding well above a six-week low touched earlier this week.
The dollar was slightly higher against the yen at 101.30 JPY= , while the euro was steady at $1.1150 EUR= .
Payrolls processor ADP said on Wednesday that U.S. private employers added 179,000 jobs in July, above economists' expectations for a gain of 170,000 jobs. polled by Reuters are looking for U.S. non-farm employment to have risen by 180,000 in July, while the unemployment rate is forecast to edge down to 4.8 percent from June's 4.9 percent. The official payrolls numbers are released on Friday.
Although expectations for an interest rate increase this year have inched higher, they are still relatively low. Federal funds futures on Wednesday implied traders saw a 42.7 percent chance of a hike in December, compared with a 38 percent on Tuesday, according to data from CME Group's FedWatch program.
Analysts say that a better-than-expected payrolls report would give the dollar traction against the resurgent Japanese yen, which firmed after the Bank of Japan's monetary policy on Friday disappointed investors expecting more drastic easing steps.
The dollar is down about 0.7 percent for the week against the yen, which prompted a verbal warning from Japan's top currency diplomat on Wednesday. levels of the yen are very concerning, given the lack of action from the BOJ last week. They essentially put the onus on the fiscal side of the house," said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon.
The BOJ also said it would conduct "a comprehensive assessment" of the economy and the central bank's policy effects at its next meeting in September.
"That bodes well for the September meeting, but the problem is that you've got an entire month with the yen at these levels," said Vail.
Sterling was steady at $1.3325 GBP= as investors awaited the BOE's policy decision later on Thursday, with an interest rate cut widely expected.
Money markets have fully priced in a quarter-point cut to the central bank's main interest rates, and many economists and investors expect it to muster other measures to bolster the economy roiled by Britain's vote in June to exit the European Union.
"A cut in rates and no change in the asset purchase program is now fully priced in; it will take more than that to cause GBP to weaken further," Marshall Gittler, head of investment research at FXPrimus, said in a note.
"Indeed, we could see a 'buy the rumour, sell the fact' response to the meeting," he said.