SHANGHAI, June 9 (Reuters) - China"s yuan firmed against the dollar in thin trade on Wednesday, with the market"s focus locked on upcoming U.S. inflation data for clues to when the Federal Reserve might start tapering its monetary stimulus. Dealers said the spot yuan continued to swing around the 6.4 per dollar level, with many investors taking a "wait-and-see" approach ahead of Thursday"s U.S. inflation data and European Central Bank (ECB) meeting. In the spot market, onshore yuan opened at 6.3975 per dollar and was changing hands at 6.3949 at midday, 61 pips firmer than the previous late session close. The spot yuan kept to tight range of about 50 pips, while trading volume shrank to $12.17 billion at midday, down from a normal half-day volume of about $15 billion. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.3956 per dollar, 47 pips weaker than the previous fix of 6.3909. The market barely reacted to producer price index (PPI) data showing China"s factory gate prices rose at their fastest annual pace in over 12 years in May. "The recent RMB appreciation did little to contain the surge in commodity prices as well as PPI," said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong. "After all, it appears that the pass-through of surging PPI to CPI inflation was rather mild and gradual ... Domestically, the PBOC should have no urgency to tighten its rate hike cycle for now, given still benign CPI inflation below the annual target of around 3%." Elsewhere, head of Russia"s financial market lobby group said this week that Russia could issue OFZ government bonds denominated in Chinese yuan within two years. By midday, the global dollar index fell to 90.085 from the previous close of 90.127, while the offshore yuan was trading at 6.3942 per dollar. The yuan market at 0402 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.3956 6.3909 -0.07% Spot yuan 6.3949 6.401 0.10% Divergence from -0.01% midpoint* Spot change YTD 2.09% Spot change since 2005 29.42% revaluation Key indexes: Item Current Previous Change Thomson 97.71 97.82 -0.1 Reuters/HKEX CNH index Dollar index 90.085 90.127 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 6.3942 0.01% * Offshore 6.551 -2.37% 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 Simon Cameron-Moore) Our Standards: The Thomson Reuters Trust Principles.