TOKYO, Feb 23 (Reuters) The dollar slipped against the yen but shuffled in a tight ranges on Thursday after closely watched U.S. consumer prices data did little to alter expectations the Federal Reserve will keep bumping up interest rates.
The figures on Wednesday showed core consumer prices, which exclude volatile food and energy prices and are watched by the Fed in making policy decisions, rose 0.2 percent from a month earlier, in line with forecasts.
''The market had expected stronger inflationary pressures, so it was natural that players pared back some of their long dollar positions,'' said Tatsuro Karitani, a senior trader at Mizuho Corporate Bank.
''But the data also supported market expectations for two more rate increases in coming months, so it's hard to sell the dollar seriously,'' he said, adding that major currencies were hemmed in ranges due to a lack of key data and events.
The Fed is widely expected to boost overnight rates to 4.75 percent in March from the current 4.5 percent, with more market players forecasting the rate to climb to 5 percent by mid-year.
The headline U.S. consumer price index rose 4.0 percent from a year earlier, while the core CPI rose 2.1 percent, a notch above the upper end of the Fed's comfort zone of 2.0 percent.
In early Tokyo trade, the dollar was buying 118.40 yen, easing from around 118.55 yen in late U.S. trade.
The euro was at 141.00 yen, down from around 141.25 yen.
Against the dollar, the single currency edged down to .1905 from around .1915. The unit has been trapped within a broad range of .18 to .23 since mid-December.
Traders said that market activity was driven by exporters and importers, meaning the dollar's moves would be restricted by sell orders around 119 yen and buy orders around 117 yen.
Major currencies were also seen supported by funds fleeing volatile emerging currencies.
Karitani at Mizuho said that Japanese retail investors, who had been paring long positions in New Zealand dollars since late last year, have yet to accelerate their selling in full-force.
But if the kiwi slips below 77 yen, it could trigger selling of other higher-yielding currencies against the yen, he said.
The New Zealand dollar was trading at 77.90 yen on Thursday.
Currencies shrugged off data showing Japan logged a monthly trade deficit for the first time in five years in January.
REUTERS PDS VP0714