* U.S. stocks edge higher
* U.S. dollar up slightly after Yellen comments
* BOJ conducts special bond buying operation (Updates prices, adds European close)
By Caroline Valetkevitch
NEW YORK, Nov 17 (Reuters) - Global stock indexes rose along with the U.S. dollar on Thursday after U.S. Federal Reserve Chair Janet Yellen said the central bank could raise interest rates "relatively soon."
Yellen, who testified on the economic outlook before the congressional Joint Economic Committee, indicated little had changed following the victory of Donald Trump in the Nov. 8 U.S. presidential election.
She said she intended to serve out her term, which ends in 2018, and indicated the Fed remained on track to raise rates at its meeting next month.
Expectations have been high among investors that the Fed will raise rates in December.
The dollar receded earlier in the day from a 13-1/2 year peak, though it turned higher after upbeat U.S. economic data stoked expectations of an acceleration in U.S. economic expansion in the fourth quarter.
The dollar index, tracking the greenback relative to a basket of six foreign currencies, extended gains in U.S. afternoon trading following Yellen's comments and was last up 0.5 percent.
U.S. stocks, which rallied after Republican Donald Trump's surprise White House win on the potential for economic stimulus, edged up, led by a 1.3 percent gain in financials, which benefit from higher rates.
"A December rate hike is priced in. A number of Fed speakers have indicated that and they want the market to be prepared for when they do," said Erik Wytenus, global investment specialist at J.P. Morgan Private Bank.
"The Fed, though, is sensitive to the strength of the dollar and they don't want to hike too far too quickly."
The Dow Jones industrial average was up 1.78 points, or 0.01 percent, to 18,869.92, the S&P 500 had gained 7.22 points, or 0.33 percent, to 2,184.16 and the Nasdaq Composite had added 27.73 points, or 0.52 percent, to 5,322.31.
MSCI's all-country world stock index was up 0.3 percent, while Europe's STOXX 600 rose 0.6 percent.
In the U.S. bond market, the yield curve steepened after the U.S. data suggested the labor market is tightening and inflation is beginning to gain traction.
That prompted investors to sell government debt with longer-dated maturities.
U.S. consumer prices posted their biggest increase in six months in October, while housing starts surged to a 9-year high and jobless claims fell to the lowest since November 1973.
The 10-year note fell 15/32 in price to yield 2.275 percent.
Overseas, the Bank of Japan offered to buy unlimited bonds for the first time under a revamped policy framework as domestic debt yields surged in the wake of Trump's election victory.
More broadly, Japan's efforts will raise questions about how far central banks such as the European Central Bank and others will be willing to tolerate steep and sudden rises in government borrowing costs.
Oil prices were higher as expectations of an OPEC deal to limit production outweighed global oversupply concerns. Brent crude oil was up 11 cents a barrel at $46.74, while U.S. crude was up 6 cents at $45.63.
For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Additional reporting by Marc Dones and Dhara Ranasinghe in London and Tanya Agrawal; Editing by Bernadette Baum and Dan Grebler