* Dollar posts modest losses as Fed sticks to gradual hike message

* BOJ next in focus, more policy easing seen close call

* Kiwi jumps after RBNZ skips chance to cut rates

By Ian Chua

SYDNEY, April 28 (Reuters) - The yen remained subdued ahead of a policy decision by the Bank of Japan on Thursday, while the dollar nursed modest losses after the Federal Reserve stuck to its script of a gradual hike in interest rates.

The dollar index slid to a near one-week low of 94.148 before drifting back to 94.387, ending the New York session with a small decline of 0.2 percent. It last stood at 94.404.

The euro climbed as far as $1.1363 but has since stepped back to $1.1325. Against the yen, the common currency hit a three-week peak of 126.41, while the greenback was at 111.60 yen, not far from a three-week high of 111.90 set recently.

Offering little hope of a move in June, the Fed said U.S. "economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate."

It went on to say the fed funds rate "is likely to remain, for some time, below levels that are expected to prevail in the longer run."

Commonwealth Bank currency strategist Elias Haddad said the Fed statement was less cautious than in March, but the FOMC appeared in no hurry to lift interest rates again soon.

In contrast, the BOJ could very well ease further later on Thursday though many say the decision will be a close call.

Any easing is likely to focus on expanding purchases of risky assets such as exchange-traded funds (ETF), though BOJ officials have said they can combine such an expansion with more government bond buying and another rate cut.

New Zealand's central bank skipped a chance to cut its interest rates on Thursday, triggering a short squeeze that saw the kiwi dollar gain a full U.S. cent.

The kiwi soared towards $0.6950, from around $0.6850, after the RBNZ kept the cash rate steady at 2.25 percent. It retained an easing bias and tried to talk down the currency, but to no avail.

The kiwi also rallied against its Aussie peer, which suffered a big setback on Wednesday after disturbingly soft inflation data flung the door wide open for a cut in rates.

The Aussie slumped to a near two two-month low of NZ$1.0941 .

Against the greenback, it posted its biggest one-day slide in eight months on Wednesday, shedding over 2 percent to as low as $0.7548. The Aussie was last at 76 U.S. cents, well below the recent high of $0.7836.

(Reporting by Ian Chua; Editing by Eric Meijer)