TOKYO, July 29 Reuters The yen edged higher on Monday, reversing early declines, with sentiment still fragile following the Japanese currency39;s best weekly rally since late April after a U.S. techled stock rout ignited demand for safe haven assets.

Traders are now looking ahead to policy decisions by the Bank of Japan and the Federal Reserve, both on Wednesday, for further direction. Rising speculation for a BOJ interest rate hike this week has helped buoy the yen, with the Fed also widely expected to set the stage for a September rate cut.

Investor were also wary of further geopolitical volatility, with Israel weighing a response to a deadly rocket strike in the Israelioccupied Golan Heights which Israel and the United States blamed on Lebanese armed group Hezbollah.

The dollar was last down 0.14 at 153.51 yen after slipping as much as 0.49 to the cusp of 153 at one point.

It had started the day by gaining as much as 0.36, as the global equity market rebound from Friday extended into Monday in Asia, with Japan39;s Nikkei stock average up more than 2.

The dollar dipped as low as 151.945 on Thursday for the first time since May 3, and ended the week down 2.4.

The rally seemed to stall in dollaryen following the Israel news, though the cause was not clear, said Shinichiro Kadota, a currency and rates strategist at Barclays in Tokyo. Sentiment remains fragile.

Ultimately, U.S. equities are still the key, Kadota added. Market moves have been led by U.S. equities,…