* Dollar rises vs yen, falls vs euro after jobs data
* Improved risk appetite boosts high-yielders
* U.S. January nonfarm payrolls falls 598,000
(Adds details, updates prices)
By Vivianne Rodrigues
NEW YORK, Feb 6 (Reuters) - The U.S. dollar rose against
the yen on Friday as a report showing a deterioration in the
U.S. labor market boosted expectations that lawmakers will act
quickly to pass a government stimulus package to help the
ailing economy.
Wall Street stocks rallied despite news from the Labor
Department that employers slashed 598,000 jobs in January, the
deepest cut in monthly payrolls in 34 years. For details, see
[]
The dismal figures may provide an incentive for U.S.
lawmakers to support the Obama administration's fiscal stimulus
program and its bank rescue plan, which will be unveiled
Monday, traders said.
"Looking beyond today's terrible figures, everybody now
expects the president's rescue plan to pass and pass fast,"
said Gregory Salvaggio, a vice president for trading at Tempus
Consulting in Washington. "That is helping lift stocks and is
taking some risk off the table, which in turn leads the market
to sell yen and buy back some dollars."
In midday trading in New York, the dollar changed hands 1
percent higher at 92.02 yen <JPY=>. The U.S. currency was on
track for its best weekly gain against the yen since November.
The yen also fell against most major counterparts,
including the euro. The European currency was last 1.7 percent
higher at 118.46 yen <EURJPY=>.
Against the dollar, the euro rose 0.6 percent to $1.2868<EUR=> and was on track for its first weekly gain versus the
greenback in 2009.
"Everyone was expecting a lousy number, we knew it would be
bad and is going to get worse. But right now, investors are
looking for the next big thing -- fiscal stimulus and a banking
rescue," said Brian Dolan, chief currency strategist at
Forex.com, in Bedminster, New Jersey.
The U.S. Senate struggled on Friday to craft the estimated
$937 billion stimulus package aimed at boosting the battered
economy. []
President Barack Obama said the package was needed urgently
to stave off "catastrophe."
HIGH-YIELDERS
Rising equities suggested a slight improvement in appetite
for risk, which also helped higher-yielding currencies
including the Australian <AUD=> and New Zealand <NZD=> dollars,
while the yen and the Swiss franc <CHF=> remained under
pressure.
Benchmark lending rates in Japan stand at 0.1 percent,
compared with 3.5 percent in New Zealand.
Sterling earlier jumped to a two-month high against the
euro, gaining from a growing view that UK interest rates are
near their trough compared with the euro zone. The euro
<EURGBP=> last traded down 0.4 percent at 87.10 pence.
The Bank of England cut interest rates to a record low of 1
percent on Thursday while the European Central Bank left rates
steady, but indicated more easing next month.
Data released in Europe showed German industrial output
fell a larger-than-expected 4.6 percent in December from the
previous month.
(Additional reporting by Steven C. Johnson and Gertrude
Chavez-Dreyfuss; editing by Gary Crosse)
