* Dollar well above Friday's post-Fed decision low
* China in focus this week, flash PMI due on Wednesday
* Japanese markets closed Mon-Wed for public holidays (Updates prices, adds comments)
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, Sept 21 (Reuters) - The dollar sagged versus the yen and euro on Monday but held above its recent lows as markets weighed if major central banks might ease policy after the Federal Reserve last week delayed a long-anticipated hike in U.S. interest rates.
Against a basket of six major currencies, the dollar last traded at 95.053 .DXY , well above Friday's low of 94.063, its lowest level since Aug. 26.
The euro EUR= edged up 0.2 percent to $1.1321, but remained below Friday's peak of $1.1460.
Given the possibility that the Bank of Japan and the European Central Bank may eventually step up their monetary stimulus, traders will probably be reluctant to sell the dollar too aggressively, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corp in Singapore.
"At the same time, it is hard to buy the dollar, since the timing of the Fed's rate hike has been pushed back," he said.
Not helping the euro, the European Central Bank's chief economist, Peter Praet, reiterated the bank's "readiness and decisiveness" to modify its trillion-euro bond-buying programme should economic turbulence merit decisive action, according to an interview in a Swiss newspaper.
Praet's comments came after ECB Executive Board member Benoit Coeure on Friday said monetary policy is on diverging paths in the euro zone and the United States.
Not to be outdone, Bank of England chief economist Andy Haldane on Friday said the bank's next move may be to cut rates, rather than raise them.
Sterling edged up 0.1 percent to $1.5542 GBP=D3 but remained below Friday's three-week high of $1.5659.
Lifting the mood of dollar bulls were comments from San Francisco Fed President John Williams, who said on Saturday a U.S. rate hike this year is still likely given the decision to stand pat was a "close call".
Still, there is uncertainty over when the Fed will actually start to raise rates, after the U.S. central bank kept them unchanged last week in a bow to worries about the global economy, financial market volatility and sluggish inflation.
Against the yen, the dollar eased 0.2 percent to 119.76 yen JPY= , holding above Friday's 1-1/2 week low near 119.04 yen.
Judging from the fact that the dollar managed to stay above 119.00 yen on Friday, the greenback will probably stay range-bound, said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.
"At this point, it's hard to think the dollar will fall toward the 116-yen levels it hit late last month," he said.
The dollar set a seven-month low of 116.15 yen on Aug. 24, as worries about China's slowdown triggered risk aversion and short-covering in the yen. From Aug. 25 onwards, however, the dollar has traded in a range of 118.25 yen to 121.76 yen.
Traders said the greenback's recovery from Friday's lows was more about position adjustment than a return of a bull run.
"In our view, the USD should struggle to gain significant upside traction this week because U.S. interest rate expectations are unlikely to adjust higher," said Elias Haddad senior currency strategist, at Commonwealth Bank.
With the Fed having sounded a cautious tone on the health of the global economy, the focus this week will likely turn to China and the flash private PMI report on Wednesday.
Trading in Asia was thinned by the start of a three-day holiday in Japan. Its financial markets reopen on Thursday.