* Policymakers meet for Wyoming mountain retreat later Thursday

* Yellen could set up dollar for test of 102 yen-strategist

TOKYO, Aug 25 (Reuters) - The dollar bobbed higher in Asian on Thursday but major currencies continued to tread water ahead of the global central bankers' gathering in Jackson Hole, Wyoming, at which Federal Reserve Chair Janet Yellen may offer new clues on U.S. monetary policy.

Futures markets on Wednesday were indicating an 18 percent chance the U.S. central bank would hike rates at its policy meeting next month, and roughly 50 percent odds of a rate increase in December, according to CME Group's FedWatch tool.

The dollar was 0.2 percent higher at 100.59 yen , inching away from the 100-yen level under which it has dipped in recent sessions.

The pair has traded in a narrow 99.55-102.83 band this month, and could move back toward the upper end of that range depending on Yellen's remarks, analysts say.

"With 40 hours to go before Janet Yellen's testimony at Jackson Hole, the dollar has finally caught a bid," Kathy Lien, managing director of FX strategy at BK Asset Management, said in a note.

The dollar is likely poised for a stronger recovery that could take it to 102 against the yen, she said.

"It probably won't happen on the back of Yellen's comments but it could happen over the next few weeks as long as 99.00 holds," said Lien.

Also weighing on the yen were growing expectations that the Bank of Japan will decide to take additional stimulus steps at its next meeting in September, when it will review its policies against a backdrop of growing doubt that the BOJ's target of 2 percent inflation target is within reach.

Japan's government kept its assessment of the economy unchanged in August but offered a slightly more downbeat view on consumer inflation than last month, as prices slid on weak household spending and the strong yen pushed down import costs.

The Cabinet Office said in its monthly report for August that consumer prices were flat a gloomier view than last month when price rises were slowing.

The dollar was flat on the day against the euro at $1.1263 . The dollar index, which tracks the greenback against a basket of six major rivals, was also flat at 94.793 .

(Reporting by Lisa Twaronite; Editing by Eric Meijer) ((lisa.twaronite@thomsonreuters.com;)(+81 3 6441 1870; Reuters Messaging: lisa.twaronite.thomsonreuters.com@reuters.net))