Euro rises; yen weakens ahead of BOJ meeting

SINGAPORE, April 24 (Reuters) - The euro gained while the Japanese yen fell on Monday in thin trading ahead of a closely watched Bank of Japan meeting and the last few data releases before Federal Reserve and European Central Bank interest rate decisions in early May.

The euro was up 0.3% against the dollar at $1.1023, back above $1.10 for the first time since it hit a 14-month high of $1.10755 earlier this month.

Against the yen, the euro hit its highest since December 2014. It was last up 0.6% at 148.34 yen . The yen was pressured overall by remarks from the new Bank of Japan governor Kazuo Ueda about the need to maintain monetary easing.

The dollar also rose versus the Japanese currency, and was up 0.4% at 134.595 yen .

"The dollar is trading with a softer bias, except against the yen. But it's well within well-worn ranges," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

"It's the calm before the storm. Next week we have the ECB and the Fed meetings, as well as the U.S. jobs data. I would be surprised if people take big bets this far away from those events."

German business morale rose slightly in April, a survey showed on Monday, adding to positive signs as Europe's largest economy hopes to have dodged a winter recession, and there were also hawkish remarks from Belgian central bank chief and ECB policy maker Pierre Wunsch.

Beyond the excitement of the euro/yen cross, currency markets were quieter, as traders waited for key central bank meetings, the first of which is the Bank of Japan on Friday, the first Ueda will chair.

Ueda is widely expected to maintain the BOJ's current ultra-easy yield curve control (YCC) policy, having reassured markets since succeeding Haruhiko Kuroda early this month that any change in policy won't happen quickly.

"We're in a pre-ECB, pre-Fed period where FX volatility has gone to die for a bit," said Simon Harvey, head of FX analysis at Monex Europe in London.

Harvey said markets were waiting for Friday because, as well as the BOJ meeting, growth and inflation data from both Germany and France were due.

"Not only are euro/dollar and dollar/yen two of the largest pairs, there are a lot of factors that could drive further moves, that are just waiting for a catalyst," he said.

Both the Fed and the ECB will meet next week, but before that markets will digest U.S. first quarter GDP and personal consumption expenditures (PCE) data, looking for signs of economic strain and evidence of sticky inflation for clues on the Fed's policy path.

Policymakers are widely expected to raise rates by another 25 basis points at next week's Federal Open Market Committee (FOMC) meeting, though the focus will be on guidance for future moves.

"Despite the Fed's best efforts, the market is pricing in a rate cut in Q3," Bannockburn's Chandler said. "I am the other way. I think the Fed is more likely to raise rates again after May than cutting rates in Q3."

Markets are expecting the ECB to raise rates by a quarter point, with the possibility of a 50 basis points hike. Euro zone inflation and growth data are also due this week.

The Swedish central bank also meets this week, on Wednesday, though Barclays said a priced-in 50 basis points hike from the Riksbank was unlikely to help the crown much beyond limiting its downside.

Elsewhere, the Swiss franc firmed, pushing the dollar 0.4% lower to 0.8890 francs .

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Currency bid prices at 10:05AM (1405 GMT)