* BoE expected to cut rates to blunt Brexit impact
* BOC holds rates steady, sounds more hopeful than expected
* Yen firms, pulling away from this week's low
TOKYO, July 14 (Reuters) - The yen firmed in early Asian trade on Thursday, while sterling was under pressure as traders braced for a Bank of England meeting that is expected to deliver an easing to blunt the economic fallout of Britain's vote to leave the European Union.
The BoE is expected to announce a cut to its benchmark interest rate to a record low of 0.25 percent from 0.5 percent when its makes its monthly policy statement at 1100 GMT. Wednesday's appointment of Theresa May as Britain's new prime minister alleviated market participants' fears about political chaos in the wake of last month's Brexit vote, many economists say the UK could still slip back into recession.
Sterling GBP= eased 0.2 percent to $1.3123.
"Even if the BoE passes on a move Thursday, they'll prepare everyone for easing later this year," Kathy Lien, managing director of FX strategy at BK Asset Management in New York, said in a note.
"If sterling rises because the Bank of England left interest rates unchanged and some part of the market was disappointed, the rally should be sold," she said.
The Canadian dollar, meanwhile, was steady at C$1.2976 against the greenback, after the Bank of Canada held interest rates steady on Wednesday, saying it believed exports and business investment would pick up even as it cut its growth forecast for 2016. remained focused on whether the Bank of Japan will expand its monetary stimulus at its policy meeting later this month, especially after former U.S. Federal Reserve chair Ben Bernanke, on a visit to Tokyo, told Japanese Prime Minister Shinzo Abe that the BOJ has steps left available to support the economy. dollar slipped 0.4 percent to 104.06 yen JPY= , pulling away from Tuesday's post-Brexit high of 104.98 yen. The euro fell 0.2 percent to 115.48 yen EURJPY=R .
Against the dollar, the European currency edged up 0.1 percent to $1.1094.
Waning exceptions that the Federal Reserve is gearing up for further interest rate hikes have weighed on the dollar this year, and investors' wariness increased after the Brexit vote roiled markets.
Philadelphia Fed President Patrick Marker said late on Wednesday that the central bank will likely opt for a "fairly shallow" series of U.S. interest rate hikes, and that he wants to "let it play out a bit" before backing a policy tightening.