How can I update a table to insert decimal points at a fixed position in numbers?

Just do this in the update:

Update [dbo].[UTM]
     SET X = STUFF(CONVERT(VARCHAR(255), X), 3, 0, '.'),
         Y = STUFF(CONVERT(VARCHAR(255), X), 3, 0, '.');

The values are converted to strings, but the strings will be implicitly converted back to whatever type X and Y are. You may get an error if the types are not compatible.

If you have negative values, then you should include them in the same data. This is handled using case:

Update [dbo].[UTM]
     SET X = STUFF(CONVERT(VARCHAR(255), X), (CASE WHEN X < 0 THEN 4 ELSE 3 END), 0, '.'),
         Y = STUFF(CONVERT(VARCHAR(255), X), (CASE WHEN X < 0 THEN 4 ELSE 3 END), 0, '.');

Try the following update:

UPDATE UTM
SET
    X = CAST(X AS DECIMAL(10,2)) / POWER(10, LEN(CAST(ABS(X) AS VARCHAR(10)))-2),
    Y = CAST(Y AS DECIMAL(10,2)) / POWER(10, LEN(CAST(ABS(Y) AS VARCHAR(10)))-2);

The logic here is to divide each number by 10 to the power of the number's length minus 2. This works for both positive and negative numbers, because we use the number's absolute value for normalizing. Follow the link below for a running demo.

Demo

This runs on an assumption from a previously deleted post (that you have negative number as well).

Firstly, as you're using a decimal(38,0) you can't store values with any kind of precision, thus you need to change the data type as well. This provides the results you appear to be looking for:

USE Sandbox;
GO

CREATE TABLE dbo.SampleTable (ID int,
                              X decimal(38,0),
                              Y decimal(38,0));
INSERT INTO dbo.SampleTable (ID,
                             X,
                             Y)
VALUES (1200,321121,345000), 
       (1201,564777,4145  ), 
       (1202,4567  ,121444), 
       (1203,12747 ,789887), 
       (1204,489899,124778),
       (1205,-32472,-27921);
GO
--Fix the datatype
ALTER TABLE dbo.SampleTable ALTER COLUMN X decimal(10,4); --Based on data provided, may need larger scale
ALTER TABLE dbo.SampleTable ALTER COLUMN Y decimal(10,4); --Based on data provided, may need larger scale
GO

--update the data
UPDATE dbo.SampleTable
SET X = STUFF(ABS(CONVERT(int,X)),3,0,'.') * CONVERT(decimal(10,4),CASE WHEN X < 0 THEN -1.0 ELSE 1.0 END),
    Y = STUFF(ABS(CONVERT(int,Y)),3,0,'.') * CONVERT(decimal(10,4),CASE WHEN Y < 0 THEN -1.0 ELSE 1.0 END);

SELECT *
FROM dbo.SampleTable;
GO

DROP TABLE dbo.SampleTable;

Note that you won't get a value like 41.45, but instead 41.4500. If you don't want to display trailing 0's you need to do the formatting in your presentation layer (otherwise you'd have to store the values as a varchar, and that's a very bad idea).