FOREX-Resilient dollar slips, markets still wary of yen intervention risk

* Yen remains in intervention danger zone

* Dollar takes a step back but set for strong June (Updates throughout)

By Dhara Ranasinghe and Gregor Stuart Hunter

LONDON, June 26 (Reuters) - The dollar slipped against most other major currencies on Friday as Federal Reserve rate hike bets were tempered a touch by the latest economic data and falling oil prices, allowing the yen - trading in an intervention danger zone - to find firmer ground.

The greenback was still poised to end the week higher and remains on track for its best month since July 2025, with gains of just over 2.3%.

Thursday's data showing a key measure of U.S. inflation met economists' expectations and easing oil prices, down more than 3% on Friday, have moderated rate-hike betsslightly.

Any dollar selling was expected to be limited for now, with focus on interest rate gaps between major economies. Traders still anticipate a Fed rate hike given a robust economy, while falling energy prices have pushed back expectations for imminent moves from the likes of the European Central Bank.

"We have had a bit of profit taking, maybe because of month-end, but I think this move in the dollar could extend a bit more," Nick Kennedy, a currency strategist at Lloyds in London, said.

"In aggregate, rate differentials are driving things again."

The dollar index, which measures the greenback's strength against a basket of six currencies, was down 0.3% at 101.19, gathering momentum during the London session.

It has edged down from more than one-year highs hit earlier in the week.

The euro was a third of a percent firmer at $1.13321, while sterling rallied 0.25% to $1.3219.

U.S. money markets are fully pricing in a one quarter-point rate hike by year-end.

STILL IN THE DANGER ZONE

Japan's yen strengthened 0.1% against the dollar to 161.60, rising from a two-year trough of 161.95 on Thursday. Breaching the 161.96 mark would take it to its weakest level since 1986.

The weaker side of 160 is considered by many in the market as a line in the sand for Japanese officials.

Some banks accelerated their timeline for rate hikes from the Bank of Japan after data showed on Friday that core inflation in Tokyo accelerated in June, providing additional support for the yen.

Kamal Sharma, Bank of America senior G10 currency strategist, said there were good reasons why Japan authorities had not stepped into markets yet.

"The yen is not the stand-out move. We've not had, in G10 parlance, sharp and excessive moves that are specific to the yen," he said.

"The market is short yen, but the pace of this move is probably not conducive to intervening."

Dollar/yen is up just 0.17% this week.

Elsewhere, the Australian dollar eased 0.14% to $0.6901. Bitcoin was up just 0.2% at $59,481, trimming earlier gains. It fell to its lowest since September 2024 earlier this week.

(Reporting by Dhara Ranasinghe; additional reporting by Gregor Stuart Hunter in Singapore ; Editing by Edwina Gibbs and Andrew Heavens)