* 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
(Releads, updates with closing New York 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 stocks rose to 5-1/2 month highs on
speculation the data will push the Federal Reserve to launch
another round of economic stimulus.
Currency tops the agenda in Washington where finance
ministers and central bankers are attending the International
Monetary Fund and World Bank weekend meeting and are expected
to seek avoidance of a full-blown currency war.[]
The U.S. Labor Department reported on Friday a modest
increase in private sector employment, but an overall loss of
95,000 jobs. For details, see []
In the report's wake, short-term U.S. government debt
prices rose modestly while longer-dated issues slipped from
earlier highs as the prospect of easier Fed monetary policy
made riskier assets like stocks more alluring.
"It was almost as if the market was cheering for a bad
report to try to solidify that the Fed would engage in
quantitative easing," said Scott Marcouiller, chief technical
market strategist at Wells Fargo Advisors in St. Louis
Investors, however, find themselves caught in the
cross-fire as policymakers work to soothe trade tensions and
avoid scuttling a nascent global economic recovery with
protectionist trade measures. []
The weaker greenback spurred spot gold to a fourth
consecutive week of gains. Gold rose but not enough to match
Thursday's record $1,364.60 per ounce. Oil prices also rose.
The Dow closed above the 11,000 mark for the first time in
five months. The blue chip average <> rose 57.90 points, or
0.53 percent, at 11,006.48. The Standard & Poor's 500 Index
<.SPX> gained 7.09 points, or 0.61 percent, at 1,165.15. The
Nasdaq Composite Index <> climbed 18.24 points, or 0.77
percent, at 2,401.91.
Shares of aluminum producer Alcoa Inc <AA.N> rose 5.65
percent to $12.89 after reporting quarterly profit above
analysts' forecast late Thursday and saying global markets were
strengthening.
Freeport-McMoRan Copper & Gold Inc <FCX.N> gained 4.4
percent to $95.51, while the S&P Materials index <.GSPM> shot
up 2.02 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 0.22
percent higher while the Thomson Reuters global stock index
<.TRXFLDGLPU> rose 1.04 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 how 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 0.56 percent to 81.87 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 flat at $1.3931 <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.
Benchmark 10-year U.S. Treasuries yielded 2.39 percent
<US10YT=RR> in late trade on Friday, unchanged from late
Thursday. The U.S. bond market will be closed on Monday for
Columbus Day.
Spot gold prices <XAU=> rose $13.60 to $1,346.30, while
crude oil <CLc1> settled up 99 cents to $82.66 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 Ellen Freilich, Jeremy Gaunt, Brian
Gorman, Chuck Mikolajczak, Nick Olivari, Vivianne Rodrigues,
Steven C Johnson and Angela Moon; Editing by Kenneth Barry)
