TOKYO, July 29 (Reuters) - The yen ticked lower on

Monday after a week when it surged to its strongest in 12 weeks

against the dollar, as a recovery in equity markets sapped

demand for the currency as a safe haven.

A flush out of long-held short yen positions also appeared

to have run its course by the end of last week, with traders now

looking to central bank decisions in Japan and the U.S. on

Wednesday for further direction.

Sterling was steady near a 2-1/2-week low to the euro ahead

of the Bank of England's policy announcement on Thursday.

The dollar gained 0.29% to 154.24 yen early in the

Asian day, after dipping as low as 151.945 on Thursday for the

first time since May 3.

Last week, the dollar sank 2.36% against the yen for its

worst weekly performance since late April.

On Monday, Japan's Nikkei stock average jumped more

than 2%.

Speculation has grown that the Bank of Japan will raise

interest rates on Wednesday at the same time as significantly

reducing its monthly bond purchases. It had promised to outline

its quantitative tightening (QT) plans at this meeting during

its previous gathering last month.

"If the BOJ holds off on hiking rates, it will need to

announce a more aggressive QT programme than expected to avoid a

'sell-the-rumour, buy-the-fact' ... reaction in USD/JPY," said

Tony Sycamore, a market analyst at IG.

Meanwhile, the Federal Reserve is widely expected to leave

rates unchanged this week, but cut them by a quarter point at

the following meeting in September.

Demand for the yen could easily reignite should stocks turn

lower as well, with the U.S. earnings calendar this week

populated with heavyweights including Amazon ( AMZN ), Apple ( AAPL )

, Meta and Microsoft ( MSFT ).

The euro gained 0.25% to 167.37 yen, and was

flat at $1.0859.

It eased 0.07% to 84.32 British pence, not

straying far from the high of 84.48 pence from Friday, the

strongest since July 10.

Sterling added 0.12% to $1.2882.

Markets see the odds of a first rate cut on Thursday as a

coin toss.

Elsewhere, the Australian dollar gained 0.31% to $0.6568,

recovering from Friday's low of $0.65105, a level not seen since

the start of May.

Leading cryptocurrency bitcoin advanced 2% to

$68,793, receiving some support from positive comments from

Republican presidential candidate Donald Trump, who told a

bitcoin conference on Saturday that the U.S. must dominate the

sector or China would.