Dollar drifts higher vs yen ahead of U.S. inflation
Data due at 1330 GMT
Central bank meetings coming up in U.S., Europe, UK, Switzerland

SINGAPORE, Dec 13 Reuters The dollar was firm on Tuesday leading in to the release of U.S. inflation data and the final Federal Reserve meeting of the year, with investors waiting to update interest rate outlooks.

A month ago, a small surprise to the downside unleashed a wave of bondbuying and dollar selling on the expectation that inflation had peaked. The U.S. figures, due at 1330 GMT, will test that assumption, while the Fed decision on Wednesday should provide some reasonably instant feedback from policymakers.

The dollar gained 0.8 on the yen on Monday and was steady at 137.70 yen through the Asia session on Tuesday. It also held onto gains versus the Australian dollar at 0.6759.

Economists polled by Reuters expect November core inflation to be steady at 0.3 monthonmonth but see moderation in the annual pace, with headline prices seen 7.3 higher than a year earlier.

A miss in either direction may get the markets to assume a followup reaction from the Fed, said NatWest Markets39; head of economics and strategy, John Briggs.

The U.S. dollar has been supported by high and rising interest rate expectations as the Fed has hiked its benchmark funds rate to counter inflation, leaving the currency vulnerable to selling if inflation seems to be cooling.

The dollar index hovered at 105.01 on Tuesday, down from a 20year high of…