* Yen softer against dollar and euro
* BOJ seen maintaining massive stimulus, no new measures expected
* Aussie dollar awaits consumer inflation data
By Ian Chua
SYDNEY, Jan 22 The yen was on the back foot early on Wednesday with investors unwilling to take aggressive bets ahead of the outcome of the Bank of Japan (BOJ) policy meeting.
The BOJ is widely expected to maintain a wait-and-see stance having embarked on a massive stimulus program last year. It prefers not to ease again unless clear evidence emerges that a sales tax hike in April causes far more damage than expected.
The dollar bought 104.28 yen after hitting a one-week high of 104.75, while the euro fetched 141.40 yen off a six-week trough of 140.33.
Against the greenback, the euro currency was trading at $1.3558 after a directionless session that saw it hemmed in the previous day's range of $1.3508/3569.
"Numerous markets and FX pairs attempted but failed to break ranges, leaving a muddy near-term outlook for the Asian morning," said Sean Callow, strategist at Westpac Bank in Sydney.
"U.S. interest rates and the U.S. dollar rose into the London morning, influenced by a (Wall Street Journal) article from Fed-watcher (Jon) Hilsenrath saying the Fed will taper its QE program by another $10 billion next week, but reversed in New York despite no key data or official comment."
The dollar hit a fresh four-year high against its Canadian peer, breaking above C$1.1000 for the first time since late 2009.
It backed away from the peak after data showed Canadian manufacturing sales rose more than expected in November to their highest in almost two years. It was last at C$1.0966.
Still, concerns the Bank of Canada could sound more dovish when it announces its latest interest-rate decision on Wednesday were expected to keep the loonie pinned down.
For the Australian dollar, consumer inflation data due at 0030 GMT is key to its immediate fortunes. It traded at $0.8801 , near a 3-1/2-year trough of $0.8756 set on Monday.
"After last week's shock employment data, and with just over a week to the first RBA meeting of the year, if the CPI data comes in-line or below expectations, the probability of a rate move will increase and it will put further pressure on the ever-weakening AUD," said Evan Lucas, strategist at IG in Melbourne.
Economists forecasts by Reuters expect the headline consumer price index to come in at 0.5 percent on the quarter, taking the annual rate to 2.5 percent, bang in the middle of the Reserve Bank of Australia's 2-3 percent target range.