* Dollar/yen nears 100 yen on Fed tapering expectations
* Sterling hits 2-month low vs dollar on UK inflation data
NEW YORK, Nov 12 (Reuters) - The dollar rose to a one-month peak against the yen on Tuesday as investors began to bet the Federal Reserve will begin trimming stimulus sooner than previously anticipated. Speculation has grown that the Fed will start to reduce its $85 billion-a-month bond-buying program sooner rather than later after last Friday's release of better-than-expected U.S. jobs numbers. The Fed stimulus program has flooded the world with cheap dollars and expectations it will scale it back earlier than anticipated tend to boost the dollar. Though investors were disappointed when the Fed did not begin to slow the program in September and pushed out tapering expectations until as far as April, they are now seeing data, such as the nonfarm payrolls report, that could lead the Fed to reduce accommodation in December. "There is a stronger case for a December taper after Friday's payrolls report," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C. "While the underlying metrics of the jobs numbers are not as strong as the headline suggested, the 200,000 plus addition to payrolls in October combined with potentially strong economic reports in coming weeks could further bolster hope of a move by the Fed in December." The dollar was last up 0.5 percent to 99.65 yen, with the peak of 99.79 yen its strongest since Sept. 13. The dollar faces resistance at 100 yen and at the September peak of 100.62 yen. "Better-than-expected U.S. payrolls last week and also the outlook for easier monetary policy in Europe is helping the dollar," said Niels Christensen, currency strategist at Nordea in London. The euro was up 0.2 percent at $1.3424 and holding above a two-month low of $1.3295 hit on Thursday when it sold off sharply after the ECB's unexpected interest rate cut. The dollar index rose 0.1 percent to 81.184, edging back toward a two-month peak of 81.482 struck on Friday.
POUND DIPS Sterling slid to a two-month low against the dollar of $1.5852 after UK inflation for October fell more than expected. However, the pound may get a lift from the central bank's quarterly inflation report on Wednesday. Many in the market expect the BoE will bring forward the point at which it sees UK unemployment hitting 7 percent, the level at which it has said it would consider raising rates. Sterling was last down 0.5 percent at $1.5901. Scandinavian currencies were among the biggest losers, with the Swedish crown touching a 17-month low against the euro after weak Swedish inflation data prompted talk of a rate cut. "The CPI print from Sweden was the 'nail in the coffin' for getting a rate cut. Given that the market is not fully priced for a cut there is some more room for the Swedish crown to fall," said Carl Hammer, chief currency strategist at SEB in Stockholm. He said SEB had changed their forecasts after the data and now expected an easing of official borrowing costs in December, adding that the Swedish crown could fall to 9 or 9.10 crowns per euro. The Norwegian crown also hit its lowest in nearly four years against the euro on expectations the Norwegian Central Bank would follow the European Central Bank and cut rates next year.