SHANGHAI, May 21 (Reuters) - China"s yuan inched higher on Friday and looked set for a marginal weekly gain against a weaker dollar as investor concerns about tapering talk by the U.S. Federal Reserve eased. The dollar jumped briefly early in the week after minutes of the last Fed meeting showed some officials appeared ready to consider changes to monetary policy based on a continued strong economic recovery. But it soon weakened again on views that any tightening is still a long way off. Prior to the market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.43 per dollar, 164 pips or 0.26% firmer than the previous fix of 6.4464. In the spot market, onshore yuan opened at 6.4337 per dollar and was changing hands at 6.4342 at midday, 13 pips firmer than the previous late session close. Despite slight gains in the yuan on Friday, many traders and analysts it will continue to trade below the 6.4 per dollar level for the time being. "The PBOC has been setting USD/CNY fixing with an upward bias in the past sessions to ease market expectations for the yuan"s appreciation amid broad dollar weakness," said Gao Qi, FX strategist at Scotiabank in Singapore. He expected the yuan to trade between 6.40 and 6.50 per dollar in the near term, with the trade-weighted yuan basket index to stay in a range of 96.0-97.5 Ken Cheung, chief Asian FX strategist at Mizuho Bank, said market participants were anxiously awaiting policy signals from the PBOC on whether it will allow further yuan strength. "A CNY fixing setting below 6.4 will be a confirmation," Cheung said. "We reckon that the PBOC may turn more cautious on the RMB appreciation pace and the related growth risk, when the RMB basket index climbed to a 3-year high alongside weakening (economic) growth momentum." The CFETS yuan basket index, a gauge that measures the yuan strength against its major trading partners, stood at 97.2 on Friday, according to Reuters" calculations based on official data, up 2.49% so far this year. China"s FX trading platform publishes the CFETS index on a weekly and monthly basis. The yuan market at 0408 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.43 6.4464 0.26% Spot yuan 6.4342 6.4355 0.02% Divergence from 0.07% midpoint* Spot change YTD 1.46% Spot change since 2005 28.63% revaluation Key indexes: Item Current Previous Change Thomson 97.23 97.31 -0.1 Reuters/HKEX CNH index Dollar index 89.777 89.794 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.4341 0.00% * Offshore 6.5945 -2.49% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Winni Zhou and Andrew Galbraith; Editing by Kim Coghill) Our Standards: The Thomson Reuters Trust Principles.