FOREX-Dollar firms as oil plunges hit commodity currencies

* OPEC decides against cutting output

* Canadian dollar, Norwegian crown under pressure as oil slides

* Oil prices, Japan's soft inflation data weigh on yen

* Euro eyes inflation data, Swiss franc watches "gold" vote

By Tomo Uetake and Ian Chua

TOKYO/SYDNEY, Nov 28 (Reuters) - The U.S. dollar held firm early Friday after rising against commodity currencies such as the Canadian dollar and Norwegian crown on OPEC's decision not to reduce output.

Investors took aim at currencies of oil-rich countries as oil prices fell after the OPEC decision. Brent crude settled at a four-year closing low of $72.82 a barrel.

The U.S. dollar rallied to 6.9570 crowns, a high not seen in over five years, and was last at 6.9420. The dollar raced to a one-week high against its Canadian counterpart at C$1.1355 on Thursday, before steadying at C$1.1340.

The yen weakened as falling oil prices softened Japan's inflation outlook, fanning expectations of more policy easing by the Bank of Japan.

The yen declined 0.4 percent to 118.21 yen to the dollar , after rising to as high as 117.74 earlier in the day.

"In addition to the OPEC-related news, I suspect that Japan's weak inflation data weighed on the yen," said Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The inflation gauge... somewhat fueled expectations that a more prolonged monetary easing by the Bank of Japan is likely."

The core consumer inflation, which excludes volatile fresh food but includes oil products, rose 2.9 percent year-on-year in October. Excluding the effects of April's tax hike, inflation was estimated at 0.9 percent, less than halfway to meeting the BOJ's 2 percent goal, a level investors see as impossible to reach next year.

Falling prices are problems for the European Central Bank as well, as the euro zone is on the verge of slipping into deflation.

Weak inflation data in Germany and Spain raised the chance that the euro zone reading due later on Friday could undershoot expectations.

The soft outcomes in Germany and Spain suggested the risk of deflation in the wider euro area had not yet abated, putting pressure on the European Central Bank (ECB) to ease further.

"The market consensus is already for 0.3 percent, but overall the data is likely to continue to indicate the need for the ECB to deliver more easing," analysts at BNP Paribas (Xetra: 887771 - news) wrote in a note to clients.

"We reiterate that FX markets are under-pricing the probability of an announcement of broader scale asset purchases at Thursday's meeting. We remain short EURUSD and EURGBP into next week."

The common currency drifted down to $1.2457 from Thursday's high of $1.2524.

The focus this weekend will be on Switzerland, where voters on Sunday will decide if the central bank should hold more gold in its reserves.

The market has already been testing a cap on the Swiss franc, which the central bank has successfully defended since 2011. The Swiss National Bank has warned it may not be able to continue doing so should the 'yes' vote win.

The Swiss franc stood at 1.2025 francs per euro, just about 0.2 percent below the 1.20 francs cap. (Editing by Peter Cooney and Ryan Woo)