Fe and Y K-edge extended x-ray absorption fine structure, Fe(Y) L(3,2)-edge (L(3)-edge) x-ray absorption near-edge structure (XANES) and valence-band photoemission spectroscopy (VB-PES) measurements have been carried out to study soft magnetic ternary Fe(78-x)Y(x)B(22) bulk metallic glasses (BMGs). The combined XANES and VB-PES results do not show broadening of the Fe 3d band to support the previous interpretation of the reduction of the magnetic moment in BMGs by Y-induced decrease of exchange splitting of Fe 3d orbitals. Instead, the density of delocalized/itinerant Fe 3d states in the vicinity of the Fermi level is found to be reduced by Y substitution, which reduces the strength of itinerant-states-mediated ferromagnetic coupling between local spins on the Fe ions and the total magnetic moment of the Fe-based BMGs.