* Dlr steady before Fed decision; focus on economic outlook
* Uncertainty over Greece persists, weighs on euro
* Yen edges higher ahead of BoJ outcome
By Jessica Mortimer
LONDON, March 16 (Reuters) - The dollar was steady against the euro on Tuesday, hamstrung ahead of U.S. Federal Reserve and Bank of Japan policy meetings.
The Federal Open Market Committee holds a one-day meeting on Tuesday where it is expected to reiterate its vow to keep interest rates very low for an "extended period", with the market focused on the Fed's assessment of the economic outlook.
"No one seriously expects much change in the Fed's language, but the market thinks that if there is a risk it will be that they are more upbeat, which would benefit the dollar," said Jeremy Stretch, currency strategist at Rabobank in London.
However, he said nagging doubts about the strength of any recovery and caution ahead of two central bank meetings would leave the market "stuck in ranges".
The Japanese currency recovered from three-week lows against the dollar and the euro ahead of the outcome of a Bank of Japan meeting on Wednesday, in which it is expected to relax its already ultra-loose policy to fight deflation.
At 0854 GMT, the dollar index, a gauge of its performance against six major currencies, was steady at 80.202, with near term resistance seen around 80.85, its March 10 high.
The euro was steady from late New York trade at $1.3675.
"The dollar's ultimate reaction to the Fed results will be either steady on an unchanged statement or a rise if the remarks suggest an upgrade in outlook," said a senior currency options manager for a Japanese bank in Tokyo.
"There is little scope for dollar weakness surrounding this event," the manager said.
Also of interest will be whether there are more dissenters among U.S. policymakers wanting to drop the "extended period" reference after recent economic data showed U.S. consumers are buying more and firms seem ready to hire again.
The euro stayed well below the highs close to $1.38 reached on Friday when strong euro zone industrial production data prompted traders to cut short positions, as concern remained over the EU's lack of progress on Greece.
Finance ministers from the 16-country euro zone agreed on Monday to mobilise financial aid for Greece rapidly if needed, but revealed little of how their standby plan would work.
"Only a complete plan, which defines not just the aid payments but also the conditions it is linked to, the control mechanisms and the sanctions to be taken in case the conditions are breached, would have the potential of causing a sustainable correction in euro/dollar," Commerzbank analysts said in a note.
The market awaited a German ZEW economic sentiment survey at 1000 GMT and U.S. housing starts data at 1230 GMT.
BOJ MEETING
Against the yen, the dollar fell 0.1 percent to 90.39 yen, while the euro fell 0.1 percent to 123.67 yen. Solid near term resistance for the yen is seen around 89.60 levels, the high struck on March 9.
The yen has come under pressure recently after media reports that the Bank of Japan is leaning towards monetary easing steps this week, but traders said it may be gaining some support as Japanese firms repatriate funds ahead of the year end.
The BoJ ends its two-day meeting on Wednesday and is likely to announce more easing measures, like boosting the size or duration of special fund-pumping operations.
The Australian dollar rose 0.2 percent against the dollar to $0.9157 after minutes from the Reserve Bank of Australia's latest policy meeting showed it expected to keep hiking rates towards normal levels. (Additional reporting by Satomi Noguchi in Tokyo, editing by Mike Peacock)