* DXY rises to 4-month highs after strong US housing starts data
* Yen pressured ahead of next week's BOJ meeting
* ECB on deck for Thursday, with no additional stimulus seen
TOKYO, July 20 (Reuters) - The dollar firmed in early Asian trading on Wednesday, as strong U.S. data and rising expectations that the Bank of Japan will muster additional easing steps sent the dollar index to four-month highs.
Commerce Department data showed that U.S. housing starts surged 4.8 percent to a seasonally adjusted annual pace of 1.19 million units, underpinning a theme of strength in the U.S. economy. dollar index, which tracks the U.S. unit against a basket of six major rivals, stood at 97.086 .DXY , close to its overnight high of 97.148, its highest level since March 10.
"The broad sideways movement in the dollar index since March 2105 was primarily a consolidative phase, from which it will launch another leg higher," Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a note.
"Our underlying constructive outlook for the U.S. dollar remains intact," he said. "It is broadly based on the divergence between the US and most other major economies."
Fed funds futures rates show investors see almost a 50/50 chance that the U.S. central bank raises rates by its December meeting, according to CME Group's FedWatch tool, compared with less than 20 percent a few weeks ago.
The dollar was steady against the yen at 106.11 yen JPY= , after hitting 106.53 yen on Tuesday, its highest level since June 24 when markets churned in the wake of Britain's surprise vote to exit the European Union.
Speculators have been unwinding their safe-haven bids in the yen as the initial shocks from the Brexit vote dissipated, and expectations rose of additional easing from the Bank of Japan at its July 28-29 meeting.
A majority of economists polled by Reuters expect additional BOJ easing, which will likely consist of a combination of measures. policymakers won't go as far as funding government spending through direct debt monetisation, but might pursue a mix of aggressive fiscal and monetary expansion to battle deflation, according to sources familiar with the matter. euro EUR= was last down 0.5 percent at $1.1018, after plumbing a three-week low of $1.0998 on Tuesday.
The European Central Bank will hold a regular policy meeting on Thursday, its last one before an eight-week summer break. It is not expected to take any additional easing steps.
Some bond traders believe the ECB might address the scarcity of bonds it can buy under its 1.7 trillion euro stimulus programme.