SINGAPORELONDON, Jan 22 Reuters The U.S. dollar steadied on Monday as looming central bank decisions in Japan and Europe and vacillating market expectations for Fed rate cuts forced a pause in the greenback39;s dataspurred rally this year.

Japan39;s yen was the notable mover in otherwise quiet trading, as it headed away from Friday39;s 148.80 per dollar, its weakest in a month, to as firm as 147.74.

The currency, last at 148.23 per dollar, has been the worst hit against the dollar this year, tumbling about 5 in a swift reversal of December39;s bounce to fivemonth peaks near 140.

The Bank of Japan39;s twoday meeting begins on Monday. Wagers for an exit from negative rates at this meeting have been wound down following the New Year39;s Day earthquake on Japan39;s west coast alongside dovish BOJ commentary.

Traders said one factor driving the yen moves was the expiry of a large amount of currency options this week and the hedging around those contracts.

LSEG data showed that while most options expiring between Monday and Thursday with strike prices between 147.15 and 148.10 dollaryen levels were small, the cumulative amount was around 2.6 billion.

The options put on ahead of BOJ are punts on a breakout in case BOJ signals anything during this meeting for further policy moves, said Rong Ren Goh, fixed income investments director at Eastspring Investments in Singapore.

We might see yen chop around into the meetings and as options expire, but as long as BOJ doesnt…