FOREX-Dollar falls as Fed nerves dominate

* Investors await September Fed minutes for policy clues

* Yen firms but gains capped by BOJ easing speculation

* Sterling just off 2-week highs ahead of BOE decision (Updates after start of European trade)

By Patrick Graham

LONDON, Oct 8 (Reuters) - The dollar weakened past $1.13 per euro for the first time in a week on Thursday on nervousness over what kind of message Federal Reserve minutes due later will send on the outlook for interest rates and growth.

Caution over the minutes of the September meeting also prodded the dollar a third of a percent lower against the yen and 0.7 percent lower against the Swiss franc with eyes also turning to publications by the European Central Bank and Bank of England due around midday in Europe.

Dealers said any further gains for the euro were likely to be capped around $1.1320, keeping it within a range it has held since the aftermath of the Fed's rate decision on Sept. 17.

"There is just a little bit of caution ahead of the Fed minutes," said Ian Stannard, head of European FX strategy at Morgan Stanley in London.

"These are big risk factors for the market and that may cause a pause, but after that we would expect that more risk positive environment to bounce back. We are relatively positive on some of the emerging market and commodity-related currencies in the near term."

The dollar eased 0.2 percent to 119.78 yen, inching away from this week's high of 120.57 yen set on Tuesday. By 0800 GMT, the euro was up 0.5 percent to $1.1290.

The yen, traditionally a safe haven for investors in times of economic stress, has benefited from the volatile mood on stock markets since August.

Although Shanghai shares climbed 3.4 percent as Chinese markets resumed trade after being on holiday since the start of the month, European equity markets were reluctant to push higher.

Against a basket of major currencies, the dollar last traded at 95.461, staying within its range so far in October of 95.218 to 96.490.

Expectations that the Bank of Japan could unveil more stimulus steps as early as this month helped temper gains in the yen.

The BOJ held monetary policy steady on Wednesday but falling exports and oil prices have kept it under pressure to come up with an additional stimulus plan that might be announced after its meeting on Oct. 30, when it is also expected to cut its long-term economic and price forecasts.

Data on Thursday underscored the weakening momentum in Japan's economic recovery. The government cut its official assessment of machinery orders to say they are stalling, as core orders in August dropped 5.7 percent from the previous month, confounding consensus expectations for a 3.2 percent gain.