(Updated at 0527 GMT) The dollar was restrained on Friday by...

(Updated at 0527 GMT)

The dollar was restrained on Friday by uncertainty over the path of U.S. interest rates, while the yen strengthened after Japan's core consumer price growth picked up, reinforcing views that the Bank of Japan may soon roll back monetary stimulus.

With U.S. markets closed on Thursday for the Thanksgiving holdiay and due for a shorter trading session on Friday, currencies are likely to trade narrowly but possibly with some volatility as liquidity is expected to remain thin.

The dollar index =USD , which measures the U.S. currency with six peers, eased 0.058% to 103.71, staying close to the two-and-a-half month low of 103.17 it touched earlier this week.

The index is down 2.8% for the month, on course for its weakest monthly performance in a year on growing expectations that the Federal Reserve is done raising interest rates and could start cutting rates next year.

Markets have dialled back expectations of Fed rate cuts in 2024, with futures now showing a 26% chance that the Fed cuts its target rate at the March 2024 policy meeting, according to CME Group's FedWatch tool. That compares with a 33% chance last week.

Meanwhile, Japan's core consumer price growth picked up slightly in October, after easing the previous month, reinforcing investors' views that stubborn inflation may push the BOJ to roll back monetary stimulus before long.

ING economists said they expect the BOJ to move away from its super-accommodative stance next year.

"We believe that the BOJ may scrap the yield curve programme as early as the first quarter of next, as Japanese government bonds appear to have stabilised ... then begin its first rate hike in Q2 2024 if wage growth continues to accelerate next year."

The nationwide core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.9% year-on-year in October, government data showed on Friday, against 3.0% expected by economists in a Reuters poll.

The Japanese yen JPY=EBS strengthened 0.21% to 149.23 per dollar. The Asian currency has slowly crawled away from the near 33-year low of 151.92 it touched at the start of last week and is up 1.5% for the month.

Japan's factory activity shrank for a sixth straight month in November, while modest growth in the service sector was little changed, a business survey showed on Friday, highlighting the fragility of the economy amid soft demand and inflation.

The euro EUR=EBS stood at $1.09065, having risen 0.16% overnight after a series of preliminary surveys showed recession in Germany may be shallower than expected, which offset a downbeat reading on French business activity.

Sterling GBP=D3 was last at $1.254, up 0.06% on the day. The Australian dollar AUD=D3 rose 0.11% to $0.656, while the kiwi NZD=D3 rose 0.15% to $0.606.

Cash Treasuries resumed trading in Asia after Japan's holiday on Thursday, with the yield on 10-year Treasury notes US10YT=RR up 4.3 basis points (bps) to 4.459%.

The yield on the 30-year Treasury bond US30YT=RR rose 3.6 bps to 4.584%.

	======================================================== 
	Currency bid prices at 0527 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0906		$1.0906	 +0.01%		 +1.79%	  +1.0911	 +1.0895 
 Dollar/Yen		JPY=EBS	149.3000	   149.5850	-0.19%		 +13.77%	 +149.7000   +149.2000 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.8837		 0.8843	  -0.05%		 -4.41%	  +0.8848	 +0.8835 
 Sterling/Dollar   GBP=D3	 1.2541		 1.2536	  +0.04%		 +3.69%	  +1.2544	 +1.2527 
 Dollar/Canadian   CAD=D3	 1.3700		 1.3696	  +0.06%		 +1.14%	  +1.3711	 +1.3693 
 Aussie/Dollar	 AUD=D3	 0.6564		 0.6559	  +0.10%		 -3.69%	  +0.6570	 +0.6550 
 NZ				NZD=D3	 0.6056		 0.6052	  +0.10%		 -4.59%	  +0.6058	 +0.6045 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

	<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
World FX rates	https://tmsnrt.rs/2RBWI5E 

	^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>