* Markets nervous ahead of U.S. payroll report
* Rise in US jobless claims spurs fresh worries about
economy
* Dlr index near 3-1/2-month low, yen approaches 15-yr high
* Nikkei pares losses, European shares seen higher
* Wheat soars over 6 pct, up around 25 percent on week
(Repeats to more subscribers)
By Vikram S.Subhedar
HONG KONG, Aug 6 (Reuters) - The dollar was on the
defensive and Japanese stocks fell after weak U.S. jobless
claims figures heightened worries that Friday's payroll data
could paint a bleak picture of the U.S. economic recovery.
Data overnight showed new U.S. claims for unemployment
benefits unexpectedly rose last week to the highest level since
early April, pushing stocks on Wall Street lower.
[]
"Growing worries about employment conditions in the United
States are keeping investors on the sidelines ahead of the jobs
data, in addition to concerns about U.S. consumer spending,"
said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
European stock market futures <STXEc1> pointed to a higher
open, however, as investors hoped that job creation in the U.S.
private sector would be stronger than expected, which in turn
could boost consumer spending.
In commodities markets, U.S. wheat futures <Wc1> jumped
more than 6 percent, taking weekly gains to around 25 percent
as Russia's move to temporarily halt grain shipments sparked a
buying frenzy. []
Japan's Nikkei share average <> pared early losses to
end down 0.1 percent as traders closed positions ahead of the
weekend and the U.S. data, but the benchmark ended the week
slightly higher, supported by solid earnings from companies
including Toyota Corp <7203.T>.
So far this year the Nikkei is down nearly 9 percent, hurt
by worries that the global recovery is running out of steam and
by a stronger yen <JPY=>, which is inching towards a 15-year
high against the dollar.
With overall trading volume remaining thin and the yen's
rise slamming exporters, realised or historical volatility on
the Nikkei has jumped compared with other Asian markets.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^ For a graphic on Nikkei volatility please click
http://graphics.thomsonreuters.com/gfx/EB_20100608115033.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^ The MSCI index of Asian stocks outside of Japan
<.MIAPJ0000PUS> shrugged off early weakness to rise 0.4 percent
and looked set to gain a little over 2 percent on the week,
though it is barely in positive territory for the year to date.
According to a Reuters poll, the U.S. Labor Department is
expected to report (at 1230 GMT) that nonfarm payrolls fell
65,000 last month after declining 125,000 in June, as temporary
workers hired to conduct the decennial census were let go.
Private sector payrolls are seen rising a modest 90,000 and
the unemployment rate is expected to climb to 9.6 percent from
9.5 percent in June. []
DOLLAR, BONDS
The dollar index <.DXY> stood at 80.81, easing slightly
from late U.S. trade and near its Tuesday low of 80.469, its
lowest since mid-April.
Its 14-day relative strength index is below 30, indicating
a heavily oversold position. With the mood already so bearish,
some traders believe a result anywhere close to forecasts
<ECONUS> would likely be a relief and could see the dollar
rally.
Against the Japanese currency, the dollar traded at 86.13
yen <JPY=>, still close its November low of 84.82 yen, a break
of which would take it to a 15-year low.
Further yen gains could stir more talk of yen-selling
intervention by Japanese authorities, though most market
players think Tokyo is unlikely to pull the trigger at this
time. []
"The market is focusing on the outlook for the U.S.
economy. If the dollar breaks below the November low, it could
enter a whole new world," said Minoru Shioiri, chief manager of
forex trading at Mitsubishi UFJ Morgan Stanley Securities.
Japanese government bonds gave up early gains in jittery
trade ahead of the U.S. data. The benchmark 10-year yield fell
below 1 percent earlier in the week.
Gold <XAU=> edged up 0.2 percent to $1,197 an ounce and was
on track for its biggest weekly gain since late June as the
dollar remained mired near multi-week lows, while crude oil
futures <CLc1> rose 30 cents to $82.30 a barrel.
But the clear commodities story of the day was wheat.
Chicago Board of Trade front-month wheat futures have nearly
doubled since June 9 as the worst drought on record in Russia,
the world's third-largest exporter, destroyed crops.
(Additional reporting by Hideyuki Sano in TOKYO; Editing by
Kim Coghill)
