* U.S. economic data mostly helps bolster dollar
* Dovish U.S. FOMC minutes still weigh on dollar
* Trichet does not help euro but single currency recovers
* Dollar index earlier touches 14-month low (Recasts and updates prices, adds details from the Philadelphia Federal Reserve Bank's latest economic report)
By Nick Olivari
NEW YORK, Oct 15 (Reuters) - The dollar rose against the yen on Thursday after U.S. data bolstered expectations the economy is recovering, raising optimism that U.S. interest rates will rise sooner rather than later.
Higher U.S. interest rates would make U.S. assets more attractive to investors and increase demand for the dollars to buy them.
The euro swung between gains and losses during the session, buffeted by technical factors and comments from the European Central Bank.
U.S. data on claims for jobless benefits was not "that far from forecasts, but it was at least moving in the right direction, in terms of lower unemployment," said Nick Bennenbroek, head of currency strategy at Wells Fargo, in New York.
The dollar was last up 1.1 percent at 90.40 yen.
The euro was last up 0.1 percent at $1.4941, close to the 14-month high touched earlier in the session at $1.4967, according to Reuters data.
"It's a thin market that's technically driven and Europe is closing up," said Win Thin, senior currency strategist at Brown Brothers Harriman, in reference to the euro's recovery in the New York session.
The euro came back after failing to break below the $1.4840 level, which was around Wednesday's low and the five-day moving average, Thin said.
The euro had hit the day's low after European Central Bank President Jean-Claude Trichet repeated comments that the euro was not created to be a global reserve currency.
The U.S. Labor Department reported that initial claims for jobless benefits fell to 514,000 in the latest week. Markets were expecting claims of 525,000.
The government also released inflation data, which showed the Labor Department's closely watched core Consumer Price Index for September, which excludes food and energy, inched up slightly more than expected.
Offsetting some of that positive sentiment, however, was a report from the Federal Reserve Bank of Philadelphia showing factory activity in the U.S. Mid-Atlantic region grew less than expected in October.
GOLDMAN'S EARNINGS
Dollar trading was not without volatility, irrespective of the reports, with the dollar index earlier touching a 14-month low.
Goldman Sachs Group Inc posted better-than-expected quarterly earnings, but despite beating published forecasts, they were not enough to beat the loftiest expectations and helped take away some investor appetite for risk.
Sterling pared some gains but was still broadly higher on the day, prompted by short-covering after investors boosted short sterling positions that helped push the pound to a five-month low earlier this week, traders said. Sterling was last at $1.6257, up 1.8 percent, trading at its highest since late September.
Bank of England policy-maker Paul Fisher told the Financial Times he felt more confident the central bank's asset purchase programme was working.
But analysts said they expected further dollar weakness a day after the release of the latest minutes from the U.S. central bank's Federal Open Market Committee, which showed that some policy-makers called for increasing asset purchases.
Simon Derrick of Bank of New York Mellon said reports of Asian central banks intervening to keep their currencies from appreciating had not lifted the dollar because the market anticipated some of the dollars would be converted into euros.
Hong Kong's central bank sold HK$1.5 billion ($200 million) to keep the Hong Kong dollar within its trading band.
Earlier, the greenback fell to 14-month lows against the higher-yielding Australian dollar and a 15-month trough versus the New Zealand and Canada dollars.
Reserve Bank of Australia chief Glenn Stevens said local interest rates would need to move toward a more normal setting as economic recovery took hold, reinforcing the view that rates will be hiked for a second consecutive month in November. (Additional reporting by Wanfeng Zhou in New York and Catherine Bosley in London) (Reporting by Nick Olivari; Editing by Jan Paschal)