SHANGHAI, Nov 3 (Reuters) - China"s yuan edged up on Wednesday but moves were cautious ahead of a Federal Reserve decision later in the day which is expected to see the U.S. central bank start to roll back massive pandemic stimulus, putting pressure on emerging market currencies. Analysts said the yuan was hovering around 6.40 per dollar as financial markets awaited the Fed decision and any clues on its outlook for inflation and interest rate hikes. The People"s Bank of China set the midpoint rate at 6.4079 per dollar prior to the market open, weaker than the previous fix of 6.4009 and Reuters estimate of 6.4041. The broad dollar index fell to 94.061 from the previous close of 94.11. "While the magnitude of the spread between the actual and estimated USDCNY fix has been narrow, the persistently higher USDCNY fix above estimate is a mild form of signalling to dampen (its) appreciation pace," Maybank said in a note. The spot market opened at 6.4015 per dollar and was changing hands at 6.3990 at midday, 12 pips firmer from the previous late session close. The Fed is expected to announce the tapering of its $120 billion-a-month asset purchase programme in its policy statement at 1800 GMT. "Markets are awaiting the Fed"s statement, it"s still unclear how it would affect the dollar index," a trader from a foreign bank said. Markets are almost certain the Fed will taper but are looking to see if policymakers will give any hints about the possibility of rate hikes next year. Investors have sharply increased expectations that inflation would force the Fed to raise rates sooner and faster than projected. read more "The unknown is in the forward guidance - whether the Fed will turn more hawkish," Maybank analysts said. That uncertainty and signs of cooling global economic growth are likely to fuel more volatility in emerging market currencies next year, according to Reuters latest poll. read more Analysts predicted the yuan, the most actively traded EM currency, would depreciate more than 1% to 6.47 per dollar in a year as Chinese economy is slowing after a strong rebound from the pandemic-driven slump early last year. Separately, President Joe Biden said on Tuesday that the White House will be making an announcement about his nominations to lead the U.S. Federal Reserve "fairly quickly." read more Analysts said the nominations will likely cause jitters on the markets. The People"s Bank of China injected 50 billion yuan ($7.81 billion) through 7-day reverse repos on Wednesday morning, mitigating the daily net liquidity withdrawal to 150 billion yuan. Ken Cheung, chief Asian FX strategist at Mizuho Bank, said the PBOC will come under pressure to increase liquidity injections to fill the funding gap with 1 trillion yuan of Medium Lending Facility (MLF) loans to mature this month. The offshore yuan was trading at 6.399 per dollar. The yuan market at 4:31AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4079 6.4009 -0.11% Spot yuan 6.399 6.4002 0.02% Divergence from midpoint* -0.14% Spot change YTD 2.02% Spot change since 2005 revaluation 29.34% Key indexes: Item Current Previous Change Thomson Reuters/HKEX CNH index 100.6 100.4 0.2 Dollar index 94.061 94.11 -0.1 *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 * 6.399 0.00% Offshore non-deliverable forwards ** 6.5773 -2.58% *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . ($1 = 6.3987 Chinese yuan renminbi) Reporting by Jason Xue and Andrew Galbraith; Editnig by Kim Coghill