* Dollar slips in holiday-thinned Asia trade
* Yuan edges up ahead of FTSE Russell bond index decision
* Yen hits 7wk high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Sept 21 (Reuters) - The dollar slipped and yen and yuan led Asia's currencies a little higher on Monday, as investors looked ahead to a slew of U.S. Federal Reserve speakers this week and to a decision on the inclusion of Chinese government bonds in a global index.
Moves were slight and volumes light due to a public holiday in Japan. The dollar index, which tracks the greenback against a basket of six major currencies, dipped 0.2% to 92.779.
The yen and yuan rose about 0.3% each, with the yen JPY= touching a seven-week peak of 104.27 per dollar and the yuan CNY= hovering just below a 16-month high it hit last week.
Foreigners' Chinese bond buying has helped put the yuan on a tear, lifting it nearly 6.5% in four months.
Investors are expecting FTSE Russell will include China in its World Government Bond Index .SBWGU on Thursday, likely triggering even more inflows and supporting the currency.
"The assets under management tracking this index is big...so we are seeing some pre-positioning taking place," said Bank of Singapore currency analyst Moh Siong Sim.
"But it's not just the index, the bigger picture here is that the (Chinese) economy is doing well, there's an interest-rate differential that is supporting the currency and a Biden victory (at the U.S. election) might provide further relief."
The yuan edged back toward last week's 16-month high in Asia, rising to 6.7570 in onshore trade CNY= and pulling with it the Australian, Singapore, New Taiwan dollars as well as the Malaysian ringgit.
The Aussie AUD=D3 rose 0.4% to $0.7319, near the top end of its range of the last few weeks. The ringgit MYR= hit a seven-month high of 4.1100 on the dollar and the Singapore dollar SGD= made an eight-month peak of S$1.3543 per greenback.
The Taiwan dollar TWD=TP jumped 0.7% to a seven-year high of 28.935 per dollar, a move analysts said might be due to a combination of equity inflows and authorities seeking to project calm amid heightened cross-straits tensions.
YEN STRENGTH
The euro and sterling crept toward the top of ranges they have occupied for a couple of weeks, with the euro EUR= last at $1.1867 and sterling GBP= at $1.2958.
The yen looked to break new ground, extending a week of solid gains amid trepidation about the global economic outlook and perhaps a shift in the yen's drivers as central banks pin rates around the world at or below zero.
The yen is up nearly 2% in five consecutive weeks of gains.
"The yen is deeply undervalued on standard metrics, private sector portfolio outflows appear to have slowed, and the Bank of Japan seems to have little appetite for more deeply negative rates," Goldman Sachs (NYSE:GS) analysts said in a note.
"For these reasons we see downside risk to our 12-month dollar/yen target of 105."
In the short term, analysts said the Fed's lower-for-longer commitment on rates would drag on the dollar, though close attention will be paid to remarks from committee members this week for any more clues on the new approach to inflation.
Fed Chairman Jerome Powell is due to appear before Congressional committees later this week while Fed committee members Lael Brainard, Charles Evans, Raphael Bostic, James Bullard, Mary Daly and John Williams (NYSE:WMB) also make public speeches.
"The dovish Fed will remain a background negative for the dollar," said Terence Wu, strategist at Singapore's OCBC Bank.
"Powell's testimony (on Tuesday) will draw attention, but for now the Fed is likely done playing their cards."
Asia's laggard was the New Zealand dollar NZD=D3 , which had a muted 0.2% rise to $0.6773 ahead of a central bank meeting on Wednesday. No policy changes are expected but talk of negative rates could drag on the kiwi. AUD/