LONDON, Feb 24 Reuters The dollar index rose to sevenweek highs on Friday, as investors prepared for U.S. interest rates to stay higher for longer after a set of strong U.S. economic data.

The yen fell after a volatile Asian trading session, with incoming Bank of Japan Governor Kazuo Ueda saying it was appropriate to keep ultraloose monetary policy.

Strong U.S. jobs data and rhetoric from Federal Reserve officials this month about openness to higher rates if needed in the fight against inflation have resulted in the dollar erasing its yeartodate losses.

The dollar index which measures the U.S. currency against six others was 0.2 higher at 104.80, its highest since Jan. 6. It was set for a fourthstraight weekly gain, having risen 2.5 this month.

The dollar notching its fourthconsecutive week of gains highlights just how far the Uturn in the market narrative has gone as data this week continues to highlight strength in the U.S. economy and its underlying inflation drivers, Simon Harvey, head of FX Analysis at Monex, said.

This will likely be displayed yet again with Januarys personal consumption expenditures price index the Fed39;s preferred inflation measure due at 1330 GMT. But markets will likely wait for more Fed comments and February data for further rate hikes repricing, Harvey added.

Investors expect U.S. rates to peak in July at 5.35 and remain above 5 until the end of the year, having walked back expectations of a deep rate cut this year.

Were in a…