* Traders cut back on short euro bets ahead of ECB

* Traders eye Thursday ECB announcement after reports on stimulus

* Dollar falls against yen after BoJ keeps stimulus unchanged (Recasts throughout, adds comments, updates prices)

By Sam Forgione

NEW YORK, Jan 21 (Reuters) – The dollar slipped against the euro on Wednesday after some traders cut back on risk by reversing long-standing bets against the euro ahead of the European Central Bank’s Thursday meeting.

Recent moves from central banks such as the Swiss National Bank and the Bank of Canada have jangled nerves and contributed to a cautious tone in markets. Investor jitters rose on Wednesday after reports on the potential nature of the ECB’s expected bond-buying program.

“Nobody wants to go into this meeting with a huge position on,” said Win Thin, currency strategist at Brown Brothers Harriman in New York. “Everyone’s on their toes, very nervous.”

The ECB’s Executive Board has proposed a program that would see the bank buy 50 billion euros ($ 58 billion) in bonds per month starting in March, a euro zone source said on Wednesday. Reuters could not confirm reports from other media about the duration of the proposed program.

The reports triggered some short-covering, or rapid repurchasing of the euro by traders who had bet against or ‘shorted’ the currency, before losing steam. The euro, which earlier hit a near one-week high of $ 1.16800, last traded 0.48 percent higher against the dollar at $ 1.16050.

The dollar hit a session low of 117.18 yen, putting it near a one-month trough of 115.85 touched last week, after the Bank of Japan held off from expanding its massive bond-buying despite cutting next year’s inflation forecast.

“The market was disappointed by the lack of more quantitative easing,” said Kathy Lien, managing director at BK Asset Management in New York. The dollar was last down 0.86 percent against the yen at 117.78 yen.

The dollar hit a near one-week low against the Swiss franc of 0.85015 franc as traders continued to seek price equilibrium after the Swiss National Bank’s abandonment last week of a three-year-old cap on its value against the euro.

The dollar was last down 1.79 percent at 0.85995 franc .

The dollar index, which measures the greenback against a basket of six other major currencies, was down 0.29 percent at 92.783.

The Canadian dollar retreated to as low as C$ 1.2420 against the U.S. dollar, or 80.52 U.S. cents, after the Bank of Canada shocked the market with an interest rate cut. The Canadian dollar was last down 1.85 percent against the U.S. dollar to trade at C$ 1.2339.

(Reporting by Sam Forgione; Additional reporting by Jemima Kelly in London; Editing by James Dalgleish and Chris Reese)