FOREX-Dollar up versus yen on inflation data, oil slump

* Dollar higher vs yen on stronger U.S. inflation data

* Central bank meetings this week awaited

* Crude oil futures tumble below $120

(Recasts, adds comments, updates prices)

BY Vivianne Rodrigues

NEW YORK, Aug 4 (Reuters) - The dollar rose against the Japanese yen on Monday as oil prices sold off and a gauge of U.S. core inflation closely watched by the Federal Reserve rose more than expected.

Demand for the U.S. currency versus the euro was capped as traders awaited a host of central bank meetings this week. The Federal Reserve, the Bank of England and the European Central Bank will all issue rate decisions.

Most economists expect both the ECB and the Fed to hold benchmark interest rates steady this week.

Still, some analysts said the stronger-than-expected reading in core U.S. inflation data may support the case for a rate hike by year end. The PCE data for June was released by the Commerce Department in a report which also showed stronger-than-expected consumer spending and personal income for the month.

"The better spending and income numbers continue to suggest signs of stabilization in the U.S. while much of the economies across the pond continue to deteriorate," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.

"The higher-than-expected -increase in core PCE -- the Fed's favorite inflation gauge -- keeps Fed rate hike expectations for the end of the year on the table. It's overall dollar positive," he said.

In midday trading in New York, the dollar was 0.5 percent higher against the yen at 108.20 JPY=. The dollar also rose against a basket of six currencies and traded last 0.2 percent higher at 73.524 .DXY.

U.S. crude futures tumbled more than $5 and dropped below $120 a barrel on Monday CLc1.

The core U.S. PCE price index rose 0.3 percent in June above economists' consensus forecast for a 0.2 percent rise. For details, see [ID:nN01255394].

And another report on Monday showed new orders at U.S. factories also increased more than expected in June. [ID:nN04497968]

The euro was nearly flat at $1.5567 EUR= by midday after trading as high as $1.5631.