* Dollar steadies after selling before U.S. jobs data
* Currencies focus on reaction by stocks, bonds to payrolls
* No reaction to BOJ comments on yen
* Franc higher after Swiss reserves reach record high (New throughout after start of European trade)
By Patrick Graham
LONDON, Aug 7 (Reuters) - Major currency markets steadied on Friday, the dollar stuck in the middle of a range it has held since March after a roller-coaster week for expectations on U.S. interest rates.
The day's main event will be U.S. non-farm payrolls data at 1230 GMT. Traders said a number near the forecast 223,000 jobs ECONUS was likely to encourage bets that rates will rise within months and prod the dollar towards $1.0850 per euro.
The dollar fell 0.1 percent to $1.0935 EUR= against the euro but was roughly steady at 97.791 against a basket of currencies .DXY .
"It's pretty straightforward today - the Fed has said it wants to see improvement in the labour market, which everyone has taken as a couple of hundred thousand jobs each month," said a senior dealer with one international bank in London. "If they get that, the dollar stays bid. If not, it will sell off."
The dollar is still higher against the euro and the yen on the week, but it has stalled over the past five months at $1.08 and 125 yen respectively.
The big mover in the previous session was sterling. Debate over when interest rates will rise was cooled by the Bank of England's expressions of concern on Thursday about the strength of the pound. Sterling was down another 0.1 percent against the dollar and a quarter of a percent against the euro on Friday.
"For the FX market, perhaps the main point was that the strength of sterling was a real concern for the MPC," said Marshall Gittler, a strategist with online broker IronFX. "It will take some time for people to regain confidence in the pound."
The Swiss franc gained another 0.2 percent against the euro to hit five-month highs for the second straight day after data showed Switzerland's foreign currency reserves reached a record high. Growing reserves suggest the Swiss National Bank has been intervening more vigorously against the franc. EURCHF=
The dollar stood little changed at 124.80 yen JPY= following a retreat overnight caused by position adjustments before the payrolls release. ECONUS
"Whether the dollar can advance further against the yen will likely depend on how equities react to payrolls that could support a September hike," said Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch (NYSE:BAC) in Tokyo. "Lower equities would weigh on the dollar, but we still see the currency on an uptrend in the medium term."
The Bank of Japan stood pat on monetary policy on Friday and maintained its stimulus programme. Governor Haruhiko Kuroda's comments on the yen at a news conference afterwards drew little reaction.
Kuroda unnerved the market in June, when the yen sank to a 13-year low against the dollar, by noting that the Japanese currency was already "very weak", but he declined to discuss specific levels or pace of moves on Friday.