LONDON, Jan 5 (Reuters) - The dollar held below two-week highs on Wednesday as traders awaited the release of minutes from the Federal Reserve"s December meeting, with growing expectations of a rate hike as early as March keeping the yen pinned near a five-year low. The minutes, due at 1900 GMT, could underscore U.S. policymakers" newfound sensitivity to inflation and their readiness to act. Markets have ramped up bets on a quarter percentage point rate increase by March and fully priced one in by May. "If tapering had ended a few months ago, we think the FOMC would be raising policy rates now with the unemployment rate not far above the Fed’s long-term target and core and headline inflation ...well above," Standard Chartered analysts said. Against a basket of its rivals, the dollar index steadied at 96.269 after hitting a two-week high of 96.462 in the previous session. Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said he expected the U.S. central bank to need to raise interest rates twice this year to address persistently high inflation, reversing his long-held view that rates would need to stay at zero until at least 2024. read more Partial U.S. labour data on Wednesday and non-farm payrolls on Friday will also be watched for a guide to the borrowing costs trajectory. The Japanese yen weakened past psychological support levels versus the greenback around 115.50 on Tuesday to hit a five-year trough at 116.35. It was trading at 115.90 on Wednesday. The risk-sensitive Australian and New Zealand dollars struggled as fears of Omicron derailing the world"s economic recovery subside. Sterling, meanwhile, has rallied about 2.7% on the dollar in a dozen trading days since Dec. 20 as traders also reckon surging Omicron cases in Britain won"t deter the Bank of England from lifting rates.