* Investors await Bernanke testimony, BOJ meeting outcome
* Higher Japanese bond yields won't support yen -strategist
By Lisa Twaronite
TOKYO, May 22 (Reuters) - The dollar edged down against the yen in early Asian trade on Wednesday, moving away from last week's 4-1/2-year high against the Japanese currency, after comments from two U.S. Federal Reserve regional presidents suggested the central bank will continue its bond-buying scheme.
Moves were relatively small as investors awaited the outcome of the Bank of Japan's regular two-day policy meeting later in the session, and testimony from Fed Chairman Ben Bernanke as well as minutes from the Fed's last policy meeting. Bernanke will speak at 1400 GMT.
"Given words from other Fed members ahead of Bernanke's testimony, we're not expecting Bernanke to signal taking a step back from bond-buying anytime soon, so that could be a short-term negative for the dollar," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York.
"I would expect him to be upbeat about the economic assessment but cautious about headwinds, which is what he's been previously," he added.
The dollar slipped about 0.1 percent to 102.36 yen .
St. Louis Fed President James Bullard and New York Fed President William Dudley, both voting members of the Fed's policy-setting committee, hinted at a continuation of the status quo on the Fed's quantitative easing.
Bullard told an event in Frankfurt the Fed should maintain its policy, adjusting the pace of its bond buying according to incoming data, and said U.S. inflation has recently been below target.
Dudley said the economy's ability to tolerate less government spending and higher taxes in coming months will be key as to whether the Fed opts to reduce its bond purchases.
The BOJ is not expected to make any changes to its monetary policy after last month's drastic overhaul, but many bond market participants are hoping the central bank will make adjustments to its bond market operations to smooth recent volatility.
The recent rise in Japanese government bond yields will not support the yen, as the increase in volatility has hurt the confidence of Japanese investors in yen bonds, Osamu Takashima, chief currency analyst at Citibank, said in a note to clients.
On Monday, the yen strengthened from Friday's 103.32, its weakest level against the greenback since October 2008, after Japanese economics minister Akira Amari suggested at the weekend that the yen's overvaluation had been largely corrected.
Against a basket of currencies, the dollar fell 0.2 percent from late U.S. levels to 83.735, while the euro added 0.1 percent to $1.2920,
The Australian dollar inched up 0.1 percent to $0.9815 after earlier climbing as high as $0.9842, pulling away from an 11-month low of $0.9711 plumbed earlier this week.
The Aussie has lost more than 5 percent so far this month, pressured by fears of a Chinese slowdown and lower commodity prices as well as recent signs of a U.S. economic recovery.