* Yen briefly blips higher after BOJ stands pat as expected
* Australian dollar jumps as inflation data deflates rate-cut risk
* Canadian dollar under pressure, with BOC in focus
TOKYO/SYDNEY, Jan 22 (Reuters) - The Australian dollar stole the spotlight on Wednesday, rallying against the greenback after an unexpected spike in inflation led investors to scale back bets on another interest rate cut.
The yen, meanwhile, briefly blipped to its session high after the Bank of Japan kept monetary policy steady as most market participants had expected, though disappointed those hoping for additional easing measures sooner rather than later ahead of a scheduled sales tax hike in April.
"There is expectation, leading up to the increase in the consumption tax, that the BOJ is going to take more expansionary measures, so whether it was January or February or March, the general consensus is that something will be done in that period," said Bart Wakabayashi, head of forex at State Street Global Markets.
"So in that sense, maybe some thought it would happen this month, and it didn't," he said.
The BOJ clung doggedly to its upbeat consumer inflation forecasts, encouraged by signs that a broadening economic recovery may nudge firms into spending more on wages and investment. That suggested to some that no imminent monetary easing was on the horizon
The dollar bought 104.42 yen, up 0.1 percent on the day after hitting a one-week high of 104.75 yen in the previous session. It fell as low as 103.97 yen after the BOJ announcement.
The euro rose about 0.2 percent to 141.63 yen off a six-week trough of 140.28 yen touched on Monday, and above a post-BOJ session low of 141.07 yen.
Against the greenback, the euro currency was trading nearly flat at $1.3561 after a directionless overnight session that saw it hamstrung in the previous day's range of $1.3508/3569.
"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," said Sean Callow, strategist at Westpac Bank in Sydney.
The Australian dollar was up about 0.7 percent at $0.8863 after rising as high as $0.8873 from a session low of $0.8784, as the high inflation reading badly wrong-footed speculators who had been short of the currency in the wake of downbeat employment figures last week.
Dealers said stops above $0.8850 were tripped, allowing the Aussie to pull further away from a 3-1/2-year trough of $0.8756 set on Monday.
The data showed Australia's main measures of underlying inflation climbed 0.9 percent in the fourth quarter, the largest rise in over two years. Annual underlying inflation of 2.6 percent was also the highest since 2011, leaving inflation in the upper half of the Reserve Bank of Australia's long-term target of 2 to 3 percent.
The dollar inched low against its Canadian peer to C1.0972, after breaking above C$1.1000 for the first time since late 2009 in the previous session and rising as high as C$1.1019.
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.
Still, concerns the Bank of Canada could sound more dovish when it announces its latest interest-rate decision later on Wednesday were expected to keep the loonie under pressure.