U.S. core CPI rises 0.4 in February, higher than expected
Fed funds futures slightly trim rate cut expectations for June
Yen falls after BOJ gives bleak assessment of economy

NEW YORK, March 12 Reuters The U.S. dollar rose in choppy trading on Tuesday, after data showed hotterthanexpected inflation last month for the world39;s largest economy, slightly paring back expectations of an interest rate cut by the Federal Reserve at its June policy meeting.

It was a volatile session, with the U.S. dollar initially jumping after the data, then falling and eventually rising after the market digested the report. The dollar index was last up 0.3 at 103.06 .

The Labor Department report showed that the Consumer Price Index CPI rose 0.4 in February, in line with the forecast for a 0.4 increase. On a yearonyear basis, the CPI gained 3.2, compared with the estimated 3.1 rise.

Excluding volatile food and energy components, the core figure rose 0.4 monthonmonth in February, compared with an estimated 0.3 rise. Annually, it gained 3.8, compared with the forecast of a 3.7 increase.

The inflation situation is going to likely drag out for several more months, thus possibly keeping the first Fed rate cut still on the sidelines for a bit longer than expected, said Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan.

I was looking for June for the first rate cut to be the most likely and I still think that might be the most likely.

U.S. rate futures have…