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TOKYO, July 11 (Reuters) The yen crawled back towards a one-month high against the dollar on Tuesday, buoyed as the Bank of Japan appears set to raise interest rates this week for the first time in six years.

The BOJ is widely seen bumping up rates to 0.25 percent from virtually zero, but many market players are unsure whether the yen will benefit much because rates in Japan are likely to remain well below those in the United States and the euro zone.

''We've been talking about the BOJ planning to raise rates since February. So I think this has been pretty much priced in,'' said Kota Kimura, currency trading manager at Shinkin Central Bank.

BOJ officials have stressed that the central bank would lift rates slowly to nurture the economy's steady expansion. In its aggressive bid to revive the long-stagnant economy, the BOJ has held overnight rates below 0.5 percent since 1995.

For clues on the outlook, investors will scour the comments from BOJ Governor Toshihiko Fukui at his press conference after the two-day meeting wraps up on Friday.

Many analysts believe the BOJ is set to press ahead and lift rates despite the government's objections, much as it did when scrapping the previous quantitative easing policy in March.

Japanese Finance Minister Sadakazu Tanigaki repeated on Tuesday that zero rates are desirable.

''Everyone is already immune to these statements. It's just a nonfactor,'' said Noriyuki Kato, treasury manager at State Street Global Markets in Tokyo.

By 0530 GMT, the dollar slipped to 114.10 yen from around 114.30 yen late in New York trade. But the U.S. currency was still up from the one-month low of 113.45 yen struck on electronic trading platform EBS on Monday.

The euro also lost ground to 145.30 yen from around 145.55, having pulled back from the all-time peak of 147.42 yen hit last week on EBS.

Japanese investors repatriating funds from maturing French government bonds was cited as one factor behind the euro's dip against the yen, traders said.

The euro was little changed at $1.2735.

OTHER RATES DOMINATE Even as the BOJ gears up to raise rates, investors see a greater than 50 percent chance of the Federal Reserve pushing the funds rate up to 5.5 percent in August, while the European Central Bank is expected to raise rates next month to 3 percent.

The yen has struggled for much of the past 18 months against major currencies due to the very low interest rates in Japan and a steady outflow of cash from Japanese investors snapping up higher-yielding foreign assets.

Since mid-June, the yen has also hit eight-year lows against the pound and the Swiss franc.

But the dollar has also fallen this year with the Fed expected to end its two-year campaign of raising interest rates, which had helped fire a dollar rally for most of 2005.

Data last week showing U.S. employers added just 121,000 jobs in June, well below forecasts for a gain of 185,000, stoked expectations the Fed may hold rates steady at its next policy meeting For the year, the dollar has shed about 7 percent against the euro but just 3 percent against the yen.

Investors are keeping an eye out to see if China takes any more action to allow the yuan to strengthen as the anniversary of last year's revaluation approaches.

Since Beijing revalued the yuan by 2.1 percent last July 21, the Chinese currency has strengthened just 1.5 percent to the frustration of market players hoping that the yen would gain from greater yuan appreciation.

REUTERS CS SSC1110