* Dollar steadies after rough week, inches up vs yen
* Expectations of pro-growth message from Trump news conference
* Also eyed for signs of protectionism, concerns over dollar gains (New throughout after start of European trade)
By Patrick Graham
LONDON, Jan 11 (Reuters) - The dollar inched higher against the yen on Wednesday but was steady against the basket of currencies used to measure its broader strength as investors awaited U.S. President-elect Donald Trump’s first formal news conference.
The dollar has gained broadly since Trump’s victory in November as investors bet he would boost public spending and spur repatriation of overseas funds by U.S. companies, policies expected to bring higher inflation and interest rates.
But more doubts have emerged in recent weeks about that narrative, and investors will have a close eye on what the new president says about trade and relations with China.
“The dollar is still holding up quite well and there is a presumption that we are going to get support from tighter monetary policy and looser fiscal policy,” said Jeremy Stretch, head of currency strategy at CIBC in London.
“Overall we’re still constructive but it does look more a case of playing the end of the rally before we see a correction later this year.”
The dollar index was roughly steady at 102.04, in the middle of a range it has held for the past week and off a 14-year peak of 103.82 hit on Jan. 3 . Against the yen, it rose 0.1 percent to 115.92 yen, nearly 3 percent off almost one-year highs hit in December.
The euro was steady at $1.0556 after brushing a 10-day high of $1.0628 overnight.
Trump’s news conference is due to start at around 11:00 EST (1600 GMT).
“The less market positioning friendly policies (are) a strong focus on trade tariffs or perhaps more importantly if he talks about a weaker dollar policy,” Nomura analyst Jordan Rochester wrote in a note for clients.
“We wouldn’t be surprised to see 113.50 to 114 yen over coming weeks if he moves in this policy direction so soon. If he directly comments on a weaker dollar policy, the adjustment could be more (like) 110 to 112 in coming weeks.”
Expectations that the Trump administration would enact economic stimulus measures backed by massive fiscal spending have taken Wall Street to record highs and U.S. debt yields to levels unseen since 2014.
Against that backdrop, financial markets are keen to see how Trump will follow through on campaign pledges.
“The dollar is set to resume the Trump rally if he provides specifics of stimulus measures, notably those related to tax cuts, which appear achievable,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. (Additional reporting by Shinichi Saoshiro; Editing by Mark Trevelyan)