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Trump's mooted levies so far viewed as moderate

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Dollar has fallen since inauguration

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Bank of Japan set to raise rates on Friday

(Updates in morning European trading)

By Kevin Buckland and Harry Robertson

TOKYO/LONDON, Jan 23 (Reuters) - The dollar traded in

narrow ranges against major peers on Thursday, as the currency

continued to struggle for direction in the absence of concrete

announcements on tariffs from U.S. President Donald Trump.

A spate of central bank policy decisions could move

currencies over the next week, with the Bank of Japan widely

expected to raise interest rates at the end of a two-day meeting

on Friday.

Rate decisions from the U.S. Federal Reserve and European

Central Bank are scheduled for Wednesday and Thursday of next

week, respectively.

The dollar index - which measures the currency versus

six top rivals, including the euro and yen - was last up 0.09%

at 108.37 in early European trading.

It tumbled 1.2% on Monday in its steepest one-day slide

since November 2023, as Trump's first day in office brought a

barrage of executive orders but none on tariffs.

The dollar had climbed to a more than two-year high of

110.17 on Jan. 13 on the back of a strong U.S. economy and

expectations of widespread U.S. tariffs, which could dent other

countries' currencies.

The euro was down 0.15% at $1.0394. The ECB is

widely expected to cut rates by a quarter point next week.

So far this week, Trump has mooted levies of around 25% on

Canada and Mexico and 10% on China from Feb. 1. He also promised

duties on European imports, without giving details.

"President Trump has so far taken a less

hostile-than-expected approach to China," amid overall

"softer-than-expected policies and tone on tariffs", said Carol

Kong, a currency strategist at Commonwealth Bank of Australia.

At the same time, "we are cautious (that) risk sentiment

remains fragile and can quickly turn sour if President Trump

strikes a more aggressive tone".

Trump on Monday signed a trade memo ordering federal

agencies to review a range of trade issues by April 1, which

many market participants believe will be a key date in revealing

tariff plans.

The dollar was up 0.15% against China's yuan in offshore

trading, at 7.294 yuan. It has fallen around 0.5%

against the yuan, also called the renminbi, since Trump's

inauguration.

"There was a fear that there would be big tariffs on day

one, that the Chinese renminbi would weaken," said Jane Foley,

head of FX strategy at Rabobank.

"But now you've had the news from China overnight about

insurers supporting the stock market. You've had a different

tone, including a call with Trump and Xi (Jinping, China's

president) on Friday, and it's promoted maybe a different

perception of where the opportunities are."

China announced plans on Thursday to channel hundreds of

billions of yuan of investment from state-owned insurers into

shares.

Japan's yen was flat at 156.49 per dollar with

markets pricing 96% odds of a quarter-point hike on Friday.

The Canadian dollar slipped slightly to C$1.4394

against the greenback after it and the Mexican peso had a

volatile start to the year due to concerns about tariffs.

The Bank of Canada is seen as likely to reduce rates by a

quarter point next Wednesday.

The Mexican peso was little changed at 20.49 versus

the U.S. currency.