* Dollar bounces on hawkish comments from Fed's Lockhart, Dudley

* Japan official warns against excessive moves, response limited

By Shinichi Saoshiro

TOKYO, Aug 17 (Reuters) - The dollar edged away from 7-week lows against the yen and euro on Wednesday following hawkish comments from Federal Reserve officials, but the modesty of the bounce underlined market scepticism about the central bank's willingness to continue tightening policy.

The dollar nudged up 0.2 percent to 100.485 yen after falling to 99.550 overnight, its lowest since June 24, when post-Brexit referendum turmoil had boosted the safe-haven yen.

Comments by Japan's top currency diplomat Masatsugu Asakawa, who said he will respond if there are excessive currency moves, had a limited impact on the pair.

The euro was steady at $1.1274 following an overnight rise to $1.1323, its highest since June 24.

The greenback was on the defensive since late last week as downbeat U.S. indicators dented prospects of a near-term Fed rate hike.

It gained some reprieve on hawkish views expressed by Atlanta Fed President Dennis Lockhart, who said two hikes in 2016 was a possibility, and on New York Fed President William Dudley saying the central bank could possibly raise rates as soon as September.

"Hawkish views from Fed officials can prompt short covering in the dollar, but they are not sufficient enough to kick off an uptrend," said Junichi Ishikawa, forex analyst at IG Securities in Tokyo.

"This is because the markets now expect only one or two rate hikes this year, when at the end of 2015 they had expected up to four," added Ishikawa, who sees negative economic developments in Europe and Britain in the wake of Brexit weighing on the Fed's decisions and cancelling out any lift from positive U.S. indicators.

The dollar index was little changed at 94.824 after losing 0.8 percent on Tuesday, when it touched a 7-week trough of 94.426.

Sterling traded almost unchanged at $1.3037 following an overnight rise of 1.3 percent as the battered currency, which had approached 31-year lows earlier in the week, enjoyed a respite thanks to slightly higher than expected U.K. inflation data.

Investors will look to the British employment data due later in the session to see if the pound can solidify its position.

The Australian dollar edged up 0.1 percent to $0.7700 and the New Zealand dollar also gained 0.1 percent, to $0.7285.

The Canadian dollar rose against the broadly weaker greenback. The loonie fetched C$1.2857 per dollar after touching a 7-week high of C$1.2798 on Tuesday, helped by crude oil's advanced to 1-month highs.

(Editing by Shri Navaratnam)