* Weak US labor data helps U.S. bond prices
* Dollar under fire as policymakers meet in Washington
* Yen at 15-year high, euro flat versus greenback
(Rewrites first paragraphs, adds comment, updates prices)
By Daniel Bases
NEW YORK, Oct 8 (Reuters) - The U.S. dollar slid to a
15-year low versus the yen on Friday after a weak U.S. jobs
report while Wall Street edged up on speculation of more
Federal Reserve economic stimulus as policymakers in Washington
seek to avoid a currency war.
U.S. government bond prices gained on a surprise 95,000
drop in U.S. non-farm payrolls last month, according to
government data. But the expectation the Fed will pump more
cash into the economy via quantitative easing raised inflation
concerns. For details, see [].
"The twisted irony is, this should be perceived as a
negative, but Wall Street is banking on heavy Fed involvement
to help push stocks higher for the rest of the year," said Todd
Schoenberger, managing director of Landcolt Trading LLC in
Wilmington, Delaware.
"The result could be an increase in risk appetite for
equities and a move away from 'safer' and tangible investments
like Treasuries and gold," he said.
The weaker greenback spurred spot gold higher but not
enough to match Thursday's record $1,364.60 per ounce, while
oil prices rose. Global stock gauges also rose.
A brewing currency war has investors caught in a cross-fire
while the world's finance ministers and central bankers meet in
Washington to try work out a solution among themselves to
soothe trade tensions and avoid scuttling a nascent global
economic recovery with trade protectionism. []
The officials are meeting for this weekend's International
Monetary Fund and World Bank meeting. []
In midday trade, the Dow Jones industrial average <>
rose 46.73 points, or 0.43 percent, at 10,995.31. The Standard
& Poor's 500 Index <.SPX> gained 4.88 points, or 0.42 percent,
at 1,162.94. The Nasdaq Composite Index <> climbed 8.00
points, or 0.34 percent, at 2,391.67.
Shares of aluminum producer Alcoa Inc <AA.N> rose 6.3
percent to $12.97 after reporting quarterly profit above
analysts' forecast late Thursday and saying global markets were
strengthening.
Freeport-McMoRan Copper & Gold Inc <FCX.N> gained 3.8
percent to $94.93, while the S&P Materials index <.GSPM> shot
up 1.97 percent.
Mining stocks helped lift European shares to close the week
on a positive note. The FTSEurofirst 300 <> index of top
European shares just managed a 0.01 percent rise to 1,070.67.
Heavyweight miners such as Rio Tinto <RIO.L> and BHP
Billiton <BLT.L> climbed 1.9-2.0 percent, rising along with
commodity prices on expectations that the Fed will pump more
money into the system.
Banking stocks, however, resumed their four-week pullback,
with Barclays <BARC.L> losing 2.3 percent after a key investor
cut his stake in the bank. []
MSCI's All-Country World index <.MIWD00000PUS> was 0.15
percent higher while the Thomson Reuters global stock index
<.TRXFLDGLPU> rose 0.99 percent.
Japan's Nikkei stock index <> fell 0.99 percent.
CURRENCY COUNTDOWN
The start of the Washington meetings has been dominated by
the policymakers talking about taking measures to avoid a
knock-down trade protectionist brawl.
At the heart of the matter is long hoped for global
economic rebalancing and the ugly underside of
'beggar-thy-neighbor' tactics governments can employ to protect
their export economies by keeping their currencies weak.
Japan, whose export-led but stagnant economy, has said it
will continue to intervene to curb a strong yen if necessary.
China has rebuffed calls from the West to let its currency rise
faster but allowed it to firm on Friday to its highest against
the dollar since a revaluation in July 2005.
The U.S. dollar fell 0.57 percent to 81.86 yen <JPY=>,
hovering just above the 15-year low of 81.71.
Jean-Claude Juncker, the chairman of euro zone finance
ministers, said the euro exchange rate against the dollar was
too strong at $1.4000 as the dollar did not reflect U.S.
economic fundamentals. That prompted the euro to erase gains
against the dollar to trade down 0.08 percent at $1.3915
<EUR=>. [] []
"Juncker has turned the market with comments about how he's
not happy with the euro reaching $1.40,' said Michael Woolfolk,
senior currency strategist at BNY Mellon in New York.
"This adds to concern about competitive devaluations,
particularly since foreign exchange will be discussed at
official IMF meetings this weekend."
Concerns that a stronger euro <EUR=> may weigh on the pace
of Europe's economic recovery, meanwhile, were fueled by German
exports falling in August for the second consecutive month and
narrowing the trade balance. []
Bund futures pared losses after Friday's U.S. payrolls
report, rising to 131.82 from 131.64 on Thursday.
The jobs data helped lift benchmark 10-year U.S. Treasuries
12/32 of a point in price, pushing the yield down to 2.34
percent <US10YT=RR>. The U.S. bond market will be closed on
Monday for Columbus Day.
Spot gold prices <XAU=> rose $11.50 to $1,344.20, while
crude oil <CLc1> gained 90 cents to $82.57 per barrel.
U.S. agricultural futures, including corn, soybean and
wheat rose sharply in Chicago after the government estimated
this year's harvest below expectations and forecast tight
supply.
(Additional reporting by Jeremy Gaunt, Brian Gorman, Chuck
Mikolajczak, Nick Olivari, Vivianne Rodrigues, Steven C
Johnson, Angela Moon)
