* Some specs seen to have bought back USD/JPY before Jackson Hole
* Jackson Hole surprises not expected, market braces nevertheless
* Rise in U.S. yields supports dollar for time being (Adds details, graphics and quotes, updates prices)
By Shinichi Saoshiro
TOKYO, Aug 25 (Reuters) - The dollar was buoyant against the yen on Friday as some participants bought back the currency to square positions ahead of a meeting of central bankers in Jackson Hole, Wyoming.
While Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are expected to stay on script in speeches later in the day, investors are hungry for any clues on further U.S. rate rises, the timing of its balance sheet tapering and whether Europe is still looking to rein in stimulus.
Yellen is due to give a speech at 1400 GMT and Draghi will speak at 1900 GMT.
The U.S. currency was a shade firmer at 109.640 yen after gaining 0.5 percent overnight.
The greenback was poised to end 0.3 percent stronger against the yen on the week, during which it had slipped to as low as 108.635 yen on geopolitical tensions stemming from the Korean Peninsula.
Investors’ focus for the time being has shifted from geopolitics and political turmoil in Washington to monetary policy.
“The theme at Jackson Hole this year is ‘fostering a dynamic global economy’ and as such a general title suggests, the market may not get the immediate hints on interest rates it is eager to hear,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
But as a precaution some speculators appeared to have bought back the dollar before Jackson Hole, resulting in the dollar/yen’s rise, Ishizuki said.
Price data from Japan highlighted what could be a major topic of discussion at the central bankers’ gathering: why are inflationary pressures remaining so stubbornly weak despite a seemingly synchronised global economic recovery?
Japan’s core consumer prices inched up for a seventh straight month in July from a year earlier, but the gain was a tepid 0.5 percent and driven largely by higher fuel bills. The yen showed little reaction.
The euro was 0.05 percent lower at $1.1796 following a subdued overnight session, during which it was bound to a tight $1.1818-1.1784 range. It was on track to end the week with a 0.3 percent gain.
The common currency awaited ECB Draghi’s speech, though most market watchers expect he will drop few hints before the central bank’s next policy review on Sept. 7, when some expect he will announce plans to start reducing stimulus.
The euro has gained nearly 14 percent against the dollar this year and some observers were focusing on whether Draghi would choose to talk down the currency’s strength.
“Surprises from Jackson Hole, if any, would probably come from Yellen rather than Draghi, and any impact on the euro would come from moves in the dollar,” said Shin Kadota, senior strategist at Barclays in Tokyo.
“Market expectations for a December Fed rate hike have sunk quite low and there is room for improvement.”
Fed funds futures implied that traders saw a 42 percent probability of the Fed raising interest rates at its December meeting, down from around 50 percent early in July.
The dollar index against a basket of six major currencies stood little changed at 93.299 after nudging up 0.15 percent overnight on the back of a rise in U.S. Treasury yields.
The Australian and New Zealand dollars were both steady at $0.7900 and $0.7210, respectively.
The kiwi took a hit this week after the New Zealand government downgraded the country’s growth outlook for this fiscal year and next. It fell to a two-month low of $0.7192 on Thursday.
Editing by Kim Coghill and Jacqueline Wong