* Yen drifts off one-month high vs USD
* Euro & sterling pressured after more weak data
* Markets wary ahead of central bank meetings
By Ian Chua
SYDNEY, April 3 (Reuters) - The yen retreated from a one-month high against the dollar early in Asia on Wednesday, while the euro was subdued in a market largely lacking conviction as investors await policy decisions by the Bank of Japan and European Central Bank.
Yen bears are worried the BOJ might not live up to expectations as markets are already positioned for aggressive stimulus measures. Euro bulls fear the ECB could surprise with an interest rate cut as the economic outlook darkens.
The dollar was at 93.37 yen, having skidded to a one-month low of 92.57 on Tuesday. It was still some way off a 3-1/2 year high of 96.71 set last month.
The euro bought 119.72 yen after drifting off a trough of 119.15. It too remained some distance from its February peak of 127.71.
"Much of the BOJ dovishness is already priced in and traders remain wary of jumping into short yen positions at current levels," said Vassili Serebriakov, strategist at BNP Paribas.
"Furthermore, the new fiscal year in Japan means that Japanese corporates will open hedging books again. Accordingly, we suspect there could be a deeper pullback in USD/JPY in the coming weeks."
Against the greenback, the common currency slipped back to $1.2820 from a one-week high of $1.2878. This helped the dollar index edge off a one-week low.
Tough talk from Japan's Prime Minister Shinzo Abe and BOJ governor Haruhiko Kuroda about tackling deflation have set the bar very high for any further surprises.
In contrast, the ECB is widely expected to hold off on an interest rate cut for now, preferring to calm markets by pledging to keep the banking system lubricated after Cyprus's brush with financial meltdown.
The Bank of England is also likely to hold steady at its policy meeting on Thursday but more action in the form of renewed government bond-buying is expected soon.
The market has been giving sterling a wide berth and piled pressure on the currency on Tuesday after data showed British manufacturing activity shrank for a second consecutive month in March.
The pound dropped back towards $1.5100 from a high of $1.5259, and it hit an all-time low against the kiwi dollar at NZ$1.7914.
With markets wary of the yen, euro and pound, investors warmed to the New Zealand and Australian dollars, making them among the best performers overnight.
The kiwi dollar was at $0.8417, having hit a six-week high of $0.8446, while the Aussie dollar was at $1.0453 , edging ever closer to a two-month peak of $1.0497 set late last month.
Australia's central bank, as widely expected, left interest rates unchanged on Tuesday although it left the door open to more easing if needed. Still, it sounded relaxed about the economic outlook and appeared comfortable keeping rates steady.
Economic data in Asia on Wednesday include the HSBC services PMI for China.