* Dollar supported ahead of U.S. jobs report
* Also helped by U.S. regulators warning banks on rate risks
* Japan finmin says markets should determine forex levels
By Rika Otsuka
Jan 8 (Reuters) - The dollar hit a four-month high against
the yen on Friday on growing expectations that a key U.S. jobs
report would point to an improving economy.
The greenback also received help from U.S. regulators urging
banks to protect themselves against hikes in interest rates,
supporting views that the Federal Reserves will start raising
rates this year. []
The dollar briefly dipped after Japanese Finance Minister
Naoto Kan said on Friday that markets should decide currency
levels, backtracking from his earlier call for a weaker yen.
[]
"The biggest factor that has been moving dollar/yen is hopes
of a better U.S. economy and expectations for a stronger dollar
versus the yen," said Tsutomu Soma, senior manager of the foreign
securities department at Okasan Securities.
The dollar edged up 0.1 percent to 77.977 against a basket of
six major currencies <.DXY> <=USD>. It rose the previous day on a
stronger-than-expected weekly U.S. initial jobless claims report
that added to the view that the U.S. economy is continuing to
improve. []
Forecasts for payrolls have been creeping higher all week and
the median is now for a flat outcome, with some as high as a
100,000 rise <ECI/US>. []
An upbeat payrolls report would fuel talk of an early
tightening from the Federal Reserve and perhaps discourage
leveraged positions in carry currencies and commodities.
"The potential for the first positive non-farm payrolls print
since December 2007 has the U.S. dollar in pole position, aided
by its main competitors either spinning into the wall, or trying
to change drivers at full speed," said David Watt, senior foreign
currency analyst at RBC Capital.
The euro was little changed from late U.S. trade at $1.4312
<EUR=>, and not far from a recent low of $1.4257 struck on
January 4, with investors increasingly positioning for the U.S.
payrolls data.
The dollar edged down 0.2 percent from late U.S. trade to
93.20 yen <JPY=> as Japanese exporters sold the greenback and
investor pocketed profits after the pair struck a four-month peak
earlier in the day.
The dollar rose to as high as 93.78 yen on trading platform
EBS, its strongest level since late August.
Speaking after his appointment as Japan's finance minister,
Kan said on Thursday many Japanese firms were in favour of
dollar/yen around 95 yen, higher than the pair traded in late
2009.
The comments raised the possibility of intervention by
Japanese authorities if the yen strengthens.
The euro dipped 0.1 percent to 133.40 yen <EURJPY=R>, having
hit a one-month high at 134.12 yen in early Asian trade.
(Additional reporting by Anirban Nag in Sydney, Kaori Kaneko
in Tokyo; Editing by Joseph Radford)
