* Dollar index stays within sight of 11-year peak

* Recent gains in U.S. bond yields support dollar

* Euro struggles ahead of ECB policy meeting on Thursday

By Masayuki Kitano

TOKYO, March 4 (Reuters) – The dollar held firm near an 11-year high versus a basket of major currencies on Wednesday, as investors awaited U.S. economic data and a European Central Bank meeting later this week for fresh clues on policy direction.

The dollar index edged up 0.1 percent to 95.451 . On Tuesday it had touched a high of 95.570, its strongest level since September 2003.

The dollar index has gained about 5.7 percent so far this year, helped by the U.S. economy’s better performance against other major world economic regions and relatively higher U.S. interest rates.

Its rise has slowed over the past month or so, however, as investors have seen fewer catalysts to move the dollar higher given the uncertainty over whether the U.S. Federal Reserve will start raising interest rates by mid-year or wait a while longer.

Against the yen, the dollar held steady at 119.75 yen . Earlier on Wednesday, the dollar had slipped to an intraday low near 119.50 yen, down from Tuesday’s high of 120.27 yen, its highest level in nearly three weeks.

A decline in Japanese equities on Wednesday and the previous day’s drop in U.S. shares were tempering risk sentiment and helping to weigh on the dollar versus the yen, said a trader for Japanese bank in Tokyo.

That was offsetting the dollar-positive impact from rising U.S. bond yields, the trader said, adding that the bond market seemed to be bracing for the possibility of the Fed changing its forward guidance in its policy statement due later this month.

The U.S. two-year bond yield has risen about 6 basis points this week and last stood near 0.68 percent.

Some investors and analysts expect that the Fed will drop the word “patient” in its forward guidance at its policy meeting on March 17-18, paving the way for a possible rate rise in June.

Later on Wednesday, the dollar could take its cues from the U.S. ISM services report and a reading on U.S. private sector employment, ahead of U.S. jobs data due on Friday.

The euro eased 0.1 percent to $ 1.1169, after having slipped to a low near $ 1.1155 on Tuesday, its lowest level since late January.

The euro’s moves have been subdued over the past few sessions and it has struggled ahead of the ECB’s policy meeting on Thursday and the implementation of its government bond buying programme, due to start this month.

“In interest rate markets there is a focus on the actual start of quantitative easing,” said Masafumi Yamamoto, market strategist for Praevidentia Strategy in Tokyo, referring to the ECB’s bond-buying scheme.

“The QE is weighing on the overall sentiment toward the euro,” he added.

The Australian dollar got a slight lift as the market took comfort in data showing the economy grew as expected last quarter, when the risk had been for a softer outcome.

The Aussie dollar touched an intraday high of $ 0.7835 after the data but later eased off that peak and last stood at $ 0.7812 , down 0.1 percent on the day. (Additional reporting by Ian Chua in Sydney; Editing by Eric Meijer & Kim Coghill)