* Dollar index touches highest since Sept 4
* Yen clings to broad gains made overnight
* Falls in equities dampen risk sentiment
* Focus on China flash Caixin/Markit PMI
By Masayuki Kitano
SINGAPORE, Sept 23 (Reuters) - The dollar hit its highest in nearly three weeks versus a basket of currencies on Wednesday, while the yen held on to broad gains made overnight as persistent worries over a slowdown in China dampened risk sentiment.
Against a basket of major currencies, the dollar rose to 96.471 .DXY , its highest level since Sept. 4.
The euro eased 0.1 percent to $1.1110 EUR= , having pulled back from a high of $1.1460 set last week after the U.S. Federal Reserve held off from raising interest rates.
The dollar has bounced back from last week's lows as comments from several Federal Reserve officials revived expectations that the U.S. central bank could still raise interest rates this year.
The dollar inched up 0.1 percent versus the yen at 120.27 yen JPY= , but remained below this week's high of 120.66 yen.
The yen held on to the broad gains it made on Tuesday, when equity markets fell, with European equities dented by a plunge in the shares of Volkswagen (XETRA:VOWG) VOWG_p.DE , Europe's largest car maker, to four-year lows.
Lingering concerns about the prospects for global growth and the health of China's economy also dampened risk sentiment, giving a boost to safe haven currencies and assets.
"It is not plausible to blame a single corporation for the surge in risk aversion in Europe and news flow was mostly second tier, so the price action adds to the signs warning that risk aversion will persist for some time regardless of FOMC's decisions," Sean Callow, senior currency strategist at Westpac, said in a research note.
The focus now is on a flash survey on China's manufacturing activity due at 0145 GMT. Given worries about global growth and a weaker Chinese economy, the report will set the tone for markets. ECONCN
The Australian dollar fell 0.3 percent to $0.7072 AUD=D3 . Against the yen, the Aussie was down 0.2 percent at 85.00 yen AUDJPY=R , having shed 0.9 percent on Tuesday.