* Dollar pressured by surprising drop in U.S. consumer prices

* Downward revision to euro zone inflation weighs on euro

By Lisa Twaronite

TOKYO, Sept 17 (Reuters) - The dollar came under pressure in Asian trading on Thursday, after weak inflation data led investors to pare bets that the U.S. Federal Reserve will deliver an interest rate hike later in the session.

The outcome of the two-day Fed meeting continued to grip investors' attention, particularly after a surprising 0.1 percent decline in U.S. consumer prices in August.

With the Fed firmly in focus, foreign exchange market participants took in stride Standard and Poor's announcement, which came late on Wednesday in the Asian day, that it downgraded Japan's credit rating by one notch to A+. The cut brings its rating in line with those of rivals Moody's Investors Service and Fitch Ratings.

The dollar was trading at 120.54 yen, steady from late U.S. trade and holding above a low of 119.40 plumbed on Tuesday. The euro was also steady at 136.10 yen,.

The euro also bought $1.1291, down slightly, after euro zone inflation for August was revised to be weaker than initially thought, backing expectations of more bond-buying stimulus from the European Central Bank.

The dollar index, which tracks the U.S. unit against a basket of six major counterparts, was down about 0.1 percent at 95.306, but still held above a three-week low of 94.913 plumbed on Monday.

"While the rates decision will be the initial focus, it may not be the decisive factor for markets," wrote Sean Callow, senior currency strategist at Westpac in Sydney, who says investors could also react to changes in the central bank's forecasts.

"We will also see quarterly projections of growth, unemployment, inflation and the funds rate. This should include upward revisions to GDP projections but a lower profile for interest rates," Callow said in a note to clients on Thursday.

Westpac is among those expecting the Fed to hike its federal funds rate by 25 basis points - its first increase since 2006 - due to job market improvement, solid growth and sufficient inflation.

After Wednesday's lacklustre inflation figures, the chance that the U.S. central bank would end its near-zero interest rate policy fell to 21 percent, down from 27 percent late on Tuesday, according to CME Group's FedWatch program.

(Editing by Shri Navaratnam)