By Chen Yixin and Jacqueline Wong SHANGHAI, June 2 (Reuters)- The yuan ended down slightly against the dollar on Thursday after the People's Bank of China set a weaker mid-point following five days of record high fixings, reflecting its intention to let the yuan take a breather. But the yuan traded slightly firmer than the mid-point on expectations the central bank may continue to use the exchange rate to fight inflation. But dealers said a momentary retreat in the yuan from record highs does not affect its longer-term outlook as May consumer inflation is likely to hit a peak. "The central bank may control the pace of gains, with the dollar index having slightly rebounded," said a dealer at an Asian bank in Shanghai. "But we expect the yuan will rise further in June." Spot yuan closed at 6.4828 versus the dollar and traded in a narrow range between 6.4824 and 6.4849, weaker than Wednesday's close of 6.4780. It has hit seven record highs since May 24. Before trade began, the PBOC set the yuan's daily mid-point at 6.4886 against the dollar, from Wednesday's 6.4837. The central bank uses the mid-point to guide the currency. The Chinese currency has now appreciated 5.30 percent since it was depegged from the dollar in June 2010, and 1.62 percent since the start of this year. The PBOC has guided the yuan to a slew of record highs this year, with a rise of 0.2 percent in May and 0.9 percent in April. Offshore, one-year non-deliverable forwards (NDFs) were bid at 6.3650, little changed from Wednesday's close of 6.3670. Their implied yuan appreciation in a year's time was 1.94 percent.

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