(Corrects to add dropped word in headline)
* Dollar index poised to end week slightly lower
* Greenback on track for weekly gains against yen
By Lisa Twaronite and Masayuki Kitano
TOKYO/SINGAPORE, April 22 (Reuters) - The euro steadied on Friday after a volatile overnight session following the European Central Bank meeting as markets were caught between the ECB's steady stance for now and expectations of further stimulus down the road.
The European currency was on track for a slight weekly gain against its U.S. counterpart, while the dollar index, which tracks the greenback against a basket of six major rivals, was poised for a modest loss. The index last stood at 94.535 .DXY , down about 0.2 percent for the week.
The euro edged up 0.1 percent to $1.1301 EUR= . On Thursday, it had dropped to as low as $1.1270 from a more than one-week peak of $1.1399.
"This reversal caught many investors by surprise because the main takeaway from today's meeting is the ECB has no immediate plans to add stimulus nor did they feel that the currency was high enough to renew concerns about its impact on the economy," Kathy Lien, managing director at BK Asset Management in New York, said in a note to clients.
"The ECB is still dovish, they see euro area outlook risks tilted to the downside and expect rates to remain at present or lower levels for an extended period of time," she said.
The ECB held policy steady on Thursday as expected. ECB President Mario Draghi said the central bank's policy of printing money and keeping borrowing costs at rock bottom was working, adding that interest rates would stay at current record lows for a long time. dollar eased 0.1 percent versus the yen to 109.35 JPY= , but was on track for a weekly gain of 0.5 percent and well off this week's low of 107.75 yen plumbed on Monday.
The yen remained pressured by market speculation that the Bank of Japan could take further easing steps as early as its next policy meeting on April 27-28. The Japanese central bank could either expand its asset purchases or cut interest rates even further into negative territory.
Ahead of the BOJ, the Federal Reserve will holds its own policy review on April 26-27. While the Fed is not expected to take any measures, it might use its policy statement to prepare markets for an interest rate hike as early as June.
Jesper Bargmann, head of trading for Nordea Bank in Singapore, said he expects the Fed to sound dovish and the dollar to weaken against the yen in the near term.
"I think the dollar/yen range has moved a bit lower to 105-115," he said, adding that the dollar would probably test the lower boundaries of that range before heading higher.
It is unclear whether any further BOJ policy easing would result in a weaker yen, especially given how the yen strengthened in the wake of the BOJ's adoption of negative interest rates, Bargmann said.
"Even though officially it's never directed at the currency, I think that's been a big part of why they would ease, and now they've seen that it might not be working," he added.
(Editing by Shri Navaratnam)