Dollar inches down vs yen ahead of CPI

TOKYO, Nov 16 (Reuters) The dollar edged down against the yen on Thursday ahead of consumer price data that could help clarify the outlook for U.S. interest rates, a day after policy meeting minutes showed the Federal Reserve was still worried about inflation.

The U.S. currency got a boost after the central bank said in minutes of its October meeting released on Wednesday that reducing inflation was its ''greatest concern'', and after data showed unexpected strength in manufacturing in New York state.

But the minutes shed little light on whether the Fed's next move might be to hike or lower rates, and the dollar was capped as traders waited for direction from readings for the October consumer price index, due at 1330 GMT.

''Recent numbers coming out of the U.S. have had an impact on the market only for the short term,'' said the chief trader at a European investment bank in Tokyo.

''Unless a concrete message comes out from the Fed about what kind of stance they have, nothing has changed.'' Economists in a Reuters poll expect the U.S. core CPI, a key inflation indicator that strips out food and energy prices, to show a rise of 0.2 percent, the same pace seen in September.

In early Tokyo trade, the dollar edged down to 117.95 yen from around 118.05 yen in late U.S. trade.

For clues about when the Bank of Japan might next raise rates the market was eager to hear BOJ Governor Toshihiko Fukui's remarks in a news conference later in the day, after the central bank ends a two-day policy meeting.

The BOJ is expected to keep rates at 0.25 percent on Thursday, with most in the market forecasting a hike in the first quarter of 2007.

The euro slipped to 151.20 yen It stayed near the all-time high of 151.48 yen marked last week, supported by expectations that the European Central Bank will bump up rates again in December.

The single currency was little changed at $1.2825 REUTERS PDS VP0740