* Dollar/yen hits lowest level in nearly 4 weeks
* Fed signals less aggressive rate rises in coming years
* RBNZ keeps rates steady, retains easing bias (Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, Sept 22 (Reuters) - The dollar stumbled to a near 4-week low against the yen on Thursday, after the U.S. Federal Reserve kept monetary policy steady and projected a less aggressive path for interest rates hikes in coming years.
While the Fed strongly signalled that it could still tighten monetary policy by the end of the year, policy makers cut the number of rate increases they expect this year to one from two. They also forecast a less aggressive rise in interest rates next year and in 2018, according to the median projection of forecasts released with its post-meeting statement. this backdrop, analysts said the dollar could fall further against the yen in the next few months. That view appeared to be backed by a resilient yen, underpinned by doubts over whether the Bank of Japan's policy overhaul will be enough to generate inflation.
The BOJ made an abrupt shift on Wednesday to targeting yields on government bonds to achieve its elusive inflation target after years of massive money printing failed to jolt the economy out of decades-long stagnation. near-term focus is a meeting among officials from Japan's finance ministry, Financial Services Agency and the Bank of Japan, due to start at 0500 GMT, to discuss issues in global financial markets. dollar touched a low of 100.10 yen JPY= at one point, its weakest since Aug. 26. The greenback later pared some losses and was last trading at 100.25 yen, down 0.1 percent on the day.
The BOJ's policy shift is unlikely to prevent the yen from rising further, said Heng Koon How, senior FX investment strategist for Credit Suisse (SIX:CSGN).
"Market is not convinced that the BOJ is doing enough to boost inflation expectations... Overall, this does not change our view of yen strengthening off the back of Japan's strong current account surplus," Heng said.
Jasslyn Yeo, global market strategist for JPMorgan (NYSE:JPM) Asset Management in Singapore, believes the dollar will probably head lower against the yen going into the year-end, and expects the greenback could soon fall below its August low of 99.55 yen.
"Yesterday's new (BOJ) framework is not new easing. I think it more represents a softening stance towards banks and other financial institutions likely due to concerns and backlash over profitability and financial stability," Yeo said.
A drop below that August trough would take the dollar to its lowest levels since June 24, when the greenback fell to 99.00 yen - its lowest level since November 2013 - as markets turned volatile after the UK voted to leave the European Union.
The dollar index, which measures the greenback's value against a basket of six major currencies, touched a low of 95.373 .DXY =USD at one point on Thursday, its weakest level since Sept. 16.
The euro edged up 0.2 percent to $1.1202 EUR= , having pulled up from Wednesday's trough of $1.1123.
The New Zealand dollar edged lower after the Reserve Bank of New Zealand (RBNZ) left the door wide open for another interest rate cut this year.
The RBNZ kept its benchmark interest rate unchanged at 2.0 percent on Thursday but reiterated that further easing will be required. New Zealand dollar fell 0.2 percent to $0.7333 NZD=D3 . Earlier on Thursday it had risen to as high as $0.7374, its highest level in nearly 2 weeks.