SINGAPORELONDON, Feb 28 Reuters The U.S. dollar steadied on Tuesday, having lost ground a day earlier, climbing particularly against the Japanese yen, and on track for its first monthly gain since September.

The greenback39;s rally gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the U.S. Federal Reserve will have to raise interest rates more than initially expected.

The dollar index , which measures the currency against a basket of peers, was flat at 104.7, but was still set for a February gain of 2.5, its first monthly increase since September.

The dollar has made its rebound fully justified on the strength of the January numbers that came through in February, and the repricing for the Fed, said Ray Attrill, head of FX strategy at National Australia Bank, referring to the strong run of U.S. economic data.

I think we39;re sort of lurching from one major data print to another… The next move in the dollar is really a function of how the February data starts to play out in March, Atrill said.

U.S. Treasury yields have also moved higher with the inflation sensitive twoyear yield back at threeand ahalfmonth highs.

The dollar on Tuesday gained particularly against the Japanese yen , climbing 0.4 to 136.78, its highest in more than two months.

Japan39;s policy of keeping yields pinned down means the yen is sensitive to moves elsewhere. Incoming Bank of Japan BOJ Governor Kazuo Ueda said this week it was premature to…