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TOKYO, Apr 12 (Reuters) The dollar fell on Wednesday, slipping further from a one-month high against the yen as dealers grew cautious about buying the U.S. currency ahead of trade deficit data due later in the session.

Traders said that reignited geopolitical concerns also weighed on the dollar after Iran announced that it had joined the group of countries possessing nuclear technology.

The U.S. trade deficit has come into focus for the market ahead of Chinese President Hu Jintao's state visit to the United States next week.

U.S. President George W. Bush has said his meeting with Hu would focus on rising U.S. complaints about Beijing's trade and currency policies, which many in Washington blame for the United States' balloning trade gap with China.

''Sentiment seems to be slightly negative for the dollar with the Iran issue and trade data looming,'' said Kota Kimura, forex manager at Shinkin Central Bank.

Economists expect the data, due at 1230 GMT, to show the deficit shrank to $67.50 billion in February from $68.51 billion a month earlier.

The dollar fell for three years on persistent concerns about growing U.S. deficits before it rose 15 percent against the euro and the yen last year due to the U.S. currency's widening yield advantage.

Interest rate differentials still form the backdrop against which currencies are moving this year.

Sentiment for the dollar was dampened on Tuesday after Federal Reserve Bank of Minneapolis chief Gary Stern said that strong jobs growth does not necessarily stoke inflation.

The dollar hit a one-month high of 118.90 yen on Tuesday after the Bank of Japan left interest rates near zero as expected but offered no hints about when it would lift rates.

The market showed muted reaction to comments from BOJ Governor Toshihiko Fukui on Wednesday that the central bank was on alert over rising long-term rates.

By 0310 GMT, the dollar was buying 118.05 yen, down from around 118.30 yen in late U.S. trade on Tuesday and sticking to the 115.50-119.50 yen range it has been trapped in since the end of January.

The euro edged up to $1.2160 from around $1.2145.

The single European currency eased to 143.45 yen, off the high of 144.88 yen hit last week on electronic trading platform EBS -- the highest since the euro was launched in January 1999.

Iran's announcement that it possessed nuclear technology triggered some flows into the Swiss franc, seen by the market as a safe haven currency. The dollar was at 1.2965 Swiss francs down from around 1.2980 francs.

Overall, investors and dealers were seen reluctant to take fresh positions as trade thins ahead of the Easter holidays.

Reuters KD DB0933