* Dollar slips on profit-taking ahead of Trump inauguration
* Some see 'Trump rally' ending, others expect longer leg
* Yuan stabilises, offshore rate notably higher than onshore
By Hideyuki Sano
TOKYO, Jan 5 (Reuters) - The dollar stepped further away from a 14-year peak against a basket of currencies on Thursday, as investors locked in gains from its two-month-old rally after Donald Trump won the U.S. presidential election.
The dollar had soared on Trump's plans to cut taxes, boost fiscal spending and protectionist trade rhetoric, all seen as inflationary and lifting U.S. bond yields.
But uncertainty on exactly what his presidency will bring is prompting some players to close their bets on the dollar ahead of Trump's planned news conference on Jan. 11. He will be inaugurated on Jan. 20.
"Some people say the 'Trump rally' has come to an end already. Others say the real rally will begin after he will take office," said Kyosuke Suzuki, director of forex at Societe Generale. "It's not clear what the market's next theme will be."
The dollar's index against a basket of six major currencies slipped to 102.23 after having hit a 14-year high of 103.82 on Tuesday, when a strong reading from a U.S. manufacturing survey boosted the currency.
The dollar's initial support lies at 101.91, its Dec. 30 low, though a breach of that level would take it to three-week lows and could send a bearish signal in the near term.
The euro rose 0.3 percent in Asia to $1.0524, having recovered from a 14-year low of $1.0340 touched on Tuesday.
The common currency was helped at the margin by data showing euro zone prices rose faster than expected in December and surveys suggesting business growth reached its highest in more than five years.
The dollar slipped 0.5 percent to 116.62 yen after having peaked at 118.605 on Tuesday, just shy of its 10-1/2-month high of 118.66 touched on Dec. 15.
Some traders noted that there may have been dollar selling by Japanese exporters after their New Year holidays.
The Australian dollar hit a two-week high of $0.7303.
"Recent economic data is pretty good so markets are on risk-on mode overall and the dollar is supported. But U.S. bond yields are being capped so the dollar is losing its drive for further gains," said Yukio Ishizuki, currency strategist at Daiwa Securities.
U.S. bond yields edged down on Wednesday, with the 30-year yield hitting a four-week low, even as the minutes from the Federal Reserve's December policy meeting showed almost all policymakers thought the economy could grow more quickly because of fiscal stimulus under the Trump administration.
The Chinese yuan stabilised after Chinese authorities set its mid-point in line with market expectations on Thursday, a day after they tried to shore up the currency with higher a mid-point and intervention.
Their actions led to the biggest daily gain in about a year in offshore yuan on Wednesday.
The offshore yuan last traded at 6.8860 per dollar, after having gained 1.3 percent on Wednesday and hitting a one-month high of 6.8658 per dollar.
"The price action was pretty big. I suspect it was propelled by unwinding of those who had made big bets against the yuan on speculation that capital outflows will continue under a strong dollar," Daiwa's Ishizuki said.
The squeeze in the offshore yuan is leaving it more expensive than the onshore rate, which stood at 6.928 to the dollar. The offshore renminbi, or the yuan, has been mostly traded at a slight discount to the onshore one.
The Thomson Reuters/Hong Kong Exchange index of the offshore yuan hit its highest level in almost six months, though the index for onshore yuan still stood within its ranges of the past few weeks.
A private survey on China's services sector showed growth in the industries accelerated to a 17-month high in December, underpinning risk sentiment. (Editing by Jacqueline Wong and Richard Borsuk)