* Dollar/yen inches up but down from recent 7-week high
* Friday's weak U.S. wage growth data stymies dollar bulls
* Focus on U.S. data including ISM factory index on Monday
* Bullard says case for September hike still intact (Updates prices, adds comments)
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Aug 3 (Reuters) - The dollar recovered slightly against the yen on Monday, after suffering a setback late last week when subdued U.S. wage growth clouded the outlook over when U.S. interest rates were likely to rise.
The dollar edged up 0.1 percent to 124.02 yen JPY= , steadying from Friday's low near 123.50 yen, and still near the seven-week high of 124.58 yen set last week.
The dollar was sold on Friday after the U.S. Employment Cost Index rose a mere 0.2 percent in the second quarter, the smallest gain in three decades.
Against a basket of six major currencies, the dollar last traded at 97.263 .DXY =USD , staying below a one-week high of 97.773 set last Thursday.
Some analysts said the dollar could draw strength from U.S. economic indicators this week, including the Institute for Supply Management's report on U.S. factory activity due Monday and nonfarm payrolls data on Friday.
"There will probably be some dollar-buying even ahead of the U.S. jobs data, if we get good numbers before then," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.
The dollar could rise to levels near its 13-year high of 125.86 yen set in early June, if the U.S. economic data due this week come in strong, Murata said.
If data out on Wednesday shows the U.S. trade deficit widening it could throw a dampener on dollar buying, he said.
The euro held steady at $1.0981 EUR= , having backed off from Friday's intraday high of around $1.1114.
The dollar's selloff on Friday could have been far worse if not for hawkish comments from St. Louis Federal Reserve President James Bullard.
Bullard, who has long called for an earlier tightening, was quoted in a Wall Street Journal report as saying the latest U.S. economic growth data boosts the case for the central bank to raise rates in September.
His comments helped the dollar pare losses late into the U.S. session on Friday. Yet U.S. Treasury yields US2YT=RR US10YT=RR still hovered near troughs hit on Friday, suggesting some doubts remained about the timing of a Fed hike.
"Overall, we continue to see the U.S. dollar staying firm and strong," said Heng Koon How, senior FX strategist for Credit Suisse (SIX:CSGN) private banking and wealth management in Singapore.
The yen, however, could withstand the broader strength in the dollar, Heng said, if the Bank of Japan refrains from expanding its monetary stimulus. The yen looks significantly undervalued versus the dollar, he said.
"We see few reasons for it (the yen) to weaken further," Heng said.
The Australian dollar held steady at $0.7301 AUD=D3 , having recovered from a six-year low of $0.7234 plumbed on Friday.
Further gains for the Aussie are likely to be limited though after an official survey showed growth at China's big manufacturing companies unexpectedly stalled in July as demand at home and abroad weakened.
The Aussie is often used as a liquid proxy for China plays.
(Editing by Simon Cameron-Moore)