* Yellen awaited for markets to gauge her thinking on rates
* Aussie up on slightly stronger-than-expected China GDP
* Sterling outperforms peers as BOE stirs up rate hike view
* BOJ stands pat on policy as expected, yen steady vs dollar (Recasts with more comments, crown and sterling moves)
By Patrick Graham
LONDON, July 15 (Reuters) - The divergent policy outlook for central banks was back at the centre of concern for major currency markets on Wednesday, driving sterling higher, the Swedish crown lower and stymieing action in the euro and dollar.
The yen inched lower to 123.53 yen per dollar after the Bank of Japan trimmed its growth forecasts but gave a balanced and little changed account of the economic outlook, while traders awaited testimony by the U.S. Federal Reserve's Janet Yellen.
Sterling, already a major outperformer on Tuesday after Bank of England officials spoke of the growing likelihood of interest rate hikes, rose to its highest this month against the dollar, euro and yen. EURGBP= GBP= GBPJPY=
By contrast, the Swedish crown dipped as much as half a percent after minutes from the Riksbank's most recent discussions showed it ready to pump yet more cash into the economy and head off any gains for the crown. EURSEK=
Derek Halpenny, European Head of Global Markets Research at Bank of Tokyo-Mitsubishi UFJ, said that a fading of the risk of an immediate Greek exit from the euro zone was likely to see interest rate policy in the spotlight in the weeks ahead.
"There is the sense that this is how things are going to develop over the next few weeks," he said. "You go back to the traditional macro basis for currency market moves and central bank expectations should come back into play."
That said, any impact of Yellen's speech will be tempered by their following extensive remarks by her on Friday that pointed to the Fed heading toward a rate rise without giving much guidance on timing.
Many investors have turned against the idea of a September move by the Fed, leaving a number of analysts marooned with such forecasts, and there was a hint from Bank of England policymaker David Miles that British authorities could yet move first.
That helped sterling to highs of $1.5676 overnight, although jobs and wages numbers took the shine off the gains.
"Sterling is definitely turning into a good story," said Ian Stannard, Head of European FX Strategy with Morgan Stanley in London. "Miles' comments suggest there is a genuine shift taking place at the bank."
The euro EUR= has seemed largely impervious to the prospect of a Greek departure from the single currency, and U.S. data and concern over China's financial stability and growth have been clearer drivers for markets in July.
After a poor batch of U.S. retail sales on Tuesday, Chinese gross domestic product data showed the economy expanded by 7 percent, more than expected, in the second quarter. Factory output also hit a five-month high.
Chinese stock markets, a focus of concern over the past month, shrugged off the data to fall another 3 percent. The Aussie, often used as a liquid proxy for bets on China, was up 0.2 percent at $0.7464 AUD=D4 .
"Potentially China is still a bigger risk over the coming period than Greece has been," Stannard said. "It does need to be watched but at the moment that 7 percent print is going to give the market some comfort. In the margins that has helped currencies like the Aussie today." (Editing by Tom Heneghan)