* Dollar steadies after slipping on pre-U.S. jobs data adjustments
* Focus on stocks' reaction to jobs data and its impact on dollar
* Sterling dips further after sliding overnight on BOE
* Aussie steady, on track to gain about 0.6 pct this week
By Shinichi Saoshiro
TOKYO, Aug 7 (Reuters) - The dollar steadied against the euro and yen on Friday after stepping back ahead of a U.S. non-farm payrolls release that could strengthen the case for the Federal Reserve to raise interest rates in September.
The euro treaded water at $1.0921 EUR= after edging further away from a two-week trough of $1.0847 plumbed mid-week.
The greenback stood little changed at 124.69 yen JPY= following a retreat overnight caused by position adjustments before the U.S. payrolls release at 1230 GMT on Friday. ECONUS
The dollar was still poised to gain about 0.7 percent on the week after touching a two-month high of 125.015 on Wednesday.
Upbeat U.S. economic indicators that supported the case for tightening and hawkish comments by a Fed official helped the dollar scale that peak. But Friday's payrolls report is expected to play a more crucial part in shaping the "data dependent" Fed's approach towards raising rates.
Economists expect the payrolls report to show that 223,000 jobs were created in July.
"Whether the dollar can advance further against the yen will likely depend on how equities react to payrolls that could support a September hike. Lower equities would weigh on the dollar, but we still see the currency on an uptrend in the medium term," said Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch (NYSE:BAC) in Tokyo.
The Bank of Japan holds a monetary policy meeting on Friday but with most eyes fixed on U.S. jobs the gathering could be relegated to a side show. The central bank is expected to maintain its massive stimulus programme. ID:nL3N10G1B4
Elsewhere, sterling continued to flounder after the Bank of Message sent a more dovish message overnight than some had expected.
At a policy meeting on Thursday, only one member voted for an immediate rate hike against expectations for at least two members to join the hawkish camp. The BOE still pointed to a possible hike early next year. ID::nL5N10H2ZT
The pound dipped further to $1.5509 GBP=D4 after shedding 0.6 percent overnight.
The Australian dollar was steady at $0.7347 AUD=D4 , on track to gain about 0.6 percent on the week. The Aussie has benefited this week after the Reserve Bank of Australia omitted calls for its further decline. (Editing by Kim Coghill)