* Dollar holds gains ahead of key jobs numbers
* Players weary of trading on euro woes, focusing US data
* Yen stays under pressure as investors trim long positions
* High-yielders firm, may gain on improving demand for risk
By Rika Otsuka
TOKYO, June 4 (Reuters) - The dollar retained broad gains on
Friday, supported by expectations that U.S. job figures later in
the day would point to a labour market on the mend, stoking
optimism about future growth in the world's biggest economy.
The euro stayed under pressure at $1.2166 <EUR=>, not far
from a four-year low of $1.2110 hit earlier in the week, with
debt problems and worries about Europe's financial sector still
weighing on investor sentiment.
There was talk of huge double-no-touch options with a
$1.21-$1.25 range set to expire later on Friday, which could keep
the currency bottled up for now.
Market participants are turning their focus back to the U.S.
economy as they have become bored with trading on the European
debt woes, which have sparked a steep sell-off in the euro and a
wave of risk reduction in many markets, traders said.
"Players are shifting their attention to U.S. data from the
euro zone," said a trader at a European bank.
"I think the market will react if today's U.S. data shows
solid job growth, unlike what we saw last month when the market
ignored robust jobs numbers."
The dollar index was at 87.155 <.DXY> and not far from
15-month highs hit on Tuesday, with the focus on the 87.47
resistance area if the job numbers surprise on the upside.
A Reuters poll forecast U.S. payrolls data will show 513,000
jobs were created in May but some in the market are anticipating
an even stronger figure following upbeat data this week.
[]
"There is talk of 600,000 jobs being added and that kind of
number would show that the U.S. economy is showing considerable
momentum," Tony Morriss, senior currency strategist at ANZ.
On Thursday, data showed U.S. private employers added 55,000
jobs in May, according to a private report. []
[].
A robust number would fuel expectations that the Federal
Reserve will move first in tightening rates, ahead of the Bank of
Japan, which is still tackling deflation, and the European
Central Bank.
Morriss said a strong non-farm payrolls number would also
give a leg up to riskier assets and higher-yielding currencies.
The Australian dollar <AUD=D4> rose 0.3 percent to $0.8446 and
0.5 percent against the yen <AUDJPY=R> at 78.30 yen.
Traders are watching to see if the Australian dollar can hold
above the technically key 78.07 yen level -- a 38.2 percent
Fibonacci retracement of a fall from April 30 high of 88.08 yen
to a 10-month low of 71.89 yen hit on May 21.
But analysts have downgraded forecasts for the Australian and
New Zealand dollars as a spike in risk aversion and doubts about
the sustainability of a global recovery prompts investors to cut
positions in higher-yielding currencies. []
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The U.S. dollar stood at 92.71 yen <JPY=>, steady from late
U.S. trade. The greenback rose as high as 92.87 yen in early
Asian trade, its highest in more than two weeks.
The euro edged up 0.1 percent to 112.88 <EURJPY=R>, staying
well above an 8 1/2-year trough hit below 109 yen last week.
The yen has been under broad pressure against the U.S.
dollar, and on the crosses, in the past few sessions as investors
pared long yen positions built amid a spike in risk aversion last
month.
Finance Minister Naoto Kan, a fiscal conservative once best
known for battling bureaucrats, was chosen to become Japan's next
premier in a ruling party vote on Friday. []
With the market speculating that Kan will adopt a tougher
stance in fighting the yen's strength than his predecessor,
traders took it as an opportunity to cut positions.
Kan surprised markets earlier this year by saying he wanted
the yen to weaken more and that most businesses were in favour of
a dollar/yen rate around 95 yen.
(Additional reporting by Anirban Nag in Sydney and Kaori Kaneko
in Tokyo; Editing by Michael Watson)
