LONDON, March 6 - The pound was slightly lower against the dollar and the euro on Wednesday with the market caught in small ranges and looking to action on the the majors for a lead. Traders said however there had been interest in sterling/yen in recent days and sterling support at 187 yen , which has been holding for the last three sessions, was looking shaky. "Euro/dollar has managed to hold its $0.87 level and that's really determining sterling at the moment," said Philip Shaw, chief economist at Investec. The Bank of England's Monetary Policy Committee begins a two-day meeting on Wednesday, with an announcement on rates expected on Thursday. Twenty-four out of 25 economists polled by last week said they expected the BoE to leave the benchmark repo rate unchanged at a 38-year low of four percent this week but some expected interest rates to start rising from May. Shaw expected no change on interest rates, pointing out that despite signs of a global recovery, it was still early days and therefore premature to start tightening monetary policy. "Signals from the domestic economy in the past month are conflicting - with a fall in unemployment and yet growth zero in the fourth quarter. The policy prescription, given the world economic background and the mixed data, is really to keep rates on hold for the foreseeable future." The pound was quoted at 61.25 pence per euro in early trade, well within the 60.80-61.40 range of the past two weeks. Against the dollar it was trading down a quarter of a percent at the bottom of a narrow range at $1.4204/46 . Sterling was quoted around 187.27/44 yen, just above a support level at 187.00. "Sterling/yen through 187 is going to be key. It's a major medium term level and has held there for a long while and through it could see stop losses," said a trader at a UK bank. In other news, Merrill Lynch said overnight it was upgrading Japan and emerging markets and downgrading the U.S. and UK. But traders said there was little direct impact on sterling for the moment.