* Optimism about U.S. economy lifts risk appetite
* U.S. Feb payrolls fall 36,000, less than expected
* BOJ may debate easing again this month-sources
* Aussie, kiwi post best daily rise in months vs yen
(Updates prices, adds comment)
By Wanfeng Zhou
NEW YORK, March 5 (Reuters) - The dollar rose against the
yen on Friday after a government report showed U.S. employers
cut fewer jobs than expected last month, stoking optimism about
an economic recovery.
The Japanese currency also dropped versus the euro and
higher-yielding currencies such as the Australian and New
Zealand dollars as the data encouraged investors to buy risky
assets funded by cheaply borrowed yen.
The U.S. economy shed a smaller-than-expected 36,000 jobs
in February, Labor Department data showed, leaving the
unemployment rate unchanged at 9.7 percent. Analysts polled by
Reuters expected payrolls to drop by 50,000, with the jobless
rate edging up to 9.8 percent. For more, see []
"It was a risk appetite event," said Michael Woolfolk,
senior currency strategist at BNY Mellon in New York. "The fact
that the U.S. labor market is in better shape than we were
thinking supports the U.S. recovery story and it encourages
market participants to put on risky trades."
The dollar rose as high as 90.58 yen <JPY=>, the strongest
level in more than a week, according to Reuters data. It was
last at 90.37 yen, up 1.5 percent on the day.
Rising Treasury yields also helped lift dollar/yen, which
has been more sensitive to U.S. interest rate expectations
lately, analysts said. After the data, U.S. short-term interest
rate futures showed expectations the Federal Reserve would
raise its key target rate later this year rose. See
[]
But Richard Franulovich, senior currency strategist at
Westpac in New York, said the jobs data would not lead the Fed
to bring forward rate hikes. "I think they would have to wait
for three to four months of positive employment numbers," he
said.
The euro rose 1.7 percent to 122.99 yen <EURJPY=>. The
Australian dollar jumped 2.2 percent to 81.90 yen <AUDJPY=R>,
its biggest daily gain since October at current prices. The New
Zealand dollar rallied 2.8 percent to 62.86 yen <NZDJPY=R>, the
best one-day performance since May at current prices.
The Japanese currency also came under pressure after
sources said the Bank of Japan was likely to debate this month
whether to ease its ultra-loose monetary policy again as it
remained under government pressure to help pull Japan out of
deflation. []
Against the greenback, the euro rose as high as $1.3629,
according to Reuters data, reversing earlier losses as higher
stock and commodity prices lifted risk appetite. It last traded
at $1.3613, up 0.3 percent on the day <EUR=>.
Concerns about debt problems in Greece eased after a sale
of 10-year bonds on Thursday attracted strong demand. The
spread between yields on Greek government bonds and euro zone
benchmark German bunds narrowed on Friday.
Traders were watching for the outcome of a meeting between
German Chancellor Angela Merkel and Greek Prime Minister George
Papandreou in Berlin on Friday. Merkel said on Wednesday she
would offer no financial aid to Greece. The two leaders were
scheduled to hold a news conference at 12:30 p.m. (1730 GMT).
"I think the Greek situation and sovereign debt in general
is going to continue to pop its head up every now and then,"
said Ronald Simpson, director of currency research at Action
Economics in Tampa, Florida. "For now it appears it's
subsided."
The ICE Futures U.S. dollar index, which tracks the
greenback versus a basket of currencies, was down 0.1 percent
at 80.488 <.DXY>.
(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by
Andrea Ricci)
