LONDON, March 7 - Sterling rose to 10-day highs against the dollar on Thursday as the greenback fell sharply versus the yen on a combination of foreign flows into Tokyo stocks and option-related selling. Traders were waiting for the Bank of England's Monetary Policy Committee's policy decision at 1200 GMT though hardly anyone was expecting interest rates to be moved from their current 4.0 percent. They said expectations of a no-change decision were hardened after news that the Halifax house price index jumped 1.5 percent on the month in February, taking the annual rate to 16.9 percent, its highest in more than 12 years. "We've had a real yen move and that does spillover into a softer tone for the dollar against European currencies," said Rob Hayward, senior FX strategist at ABN-Amro. "I don't think anyone's expecting the BoE to do anything today and if they are the Halifax should have put a stop to that." At 0810 GMT, sterling was trading at $1.43 , nearly half a percent up on the day. The pound was steady against the euro around 61.55 pence . It hit three-week lows against the single currency on Wednesday on talk of one merger-related order but traders said those flows appeared to have abated. Dealers said the dollar had been losing ground as investors put more faith in a global economic recovery, encouraging them to buy European and Asian stocks as U.S. markets were already considered fairly priced. But they said sterling might not gain as much as other European currencies as UK stocks also already had expectatations of a firm economy built in. UK housing starts data will be out at 0930 GMT and the British Retail Consortium's shop price index will be out at 1100 GMT.