* Yen gains as poor U.S. jobs data stokes recession fears
* Euro falls as market expects ECB to cut rates on Thursday
* Euro hits 1-month low vs yen; Aussie falls 1.7 pct vs dlr
(Adds quotes, changes byline, dateline, previous HONG KONG)
By Jessica Mortimer
LONDON, Jan 12 (Reuters) - The yen rose broadly, hitting a
one-month high against the euro, on Monday as poor U.S. jobs
data last week intensified global recession fears and tempered
demand for higher-risk investments.
The euro was also under pressure as expectations gathered
pace that the European Central Bank would opt for an aggressive
interest rate cut later this week to shore up its flagging
economy.
European shares retreated in early trade as investors
continued to digest Friday's dismal U.S. payrolls data, which
showed the world's largest economy lost over one million jobs in
the final two months of the year.
The jobs figures added to the torrent of woeful economic
data from around the globe that has smothered a budding revival
of risk appetite since the start of the year.
Heightened risk aversion boosted demand for the low-yielding
yen, as well as the U.S. dollar, as investors rushed towards
safer assets and unwound carry trades, where money is borrowed
in yen to invest in high-yielding assets.
"The U.S. payrolls numbers were pretty dreadful and helped
underline fears that the U.S. labour market is undergoing a
severe deterioration, knocking market confidence and helping to
fuel yen gains," BTM-UFJ currency economist Lee Hardman.
At 0830, the euro shed 0.7 percent against both the dollar
and yen to $1.3342 <EUR=> and 120.12 yen <EURJPY=R>, a one-month
low.
The dollar also fell against the yen, losing 0.2 percent to
90.08 <JPY=>.
The market's main focus this week will be on the European
Central Bank interest rate decision on Thursday, with markets
increasingly speculating that rate-setters will opt for a 50
basis point cut in response to recent weak data.
"Going into the meeting, the euro will be under pressure as
the market expects the ECB will cut by 50 basis points as
economic data argues in favour of aggressive easing," BTM-UFJ's
Hardman said.
Currency strategists at Calyon said they are expecting a
more modest quarter-point cut, but even a smaller-than-expected
move would be a negative for the euro "as the market punishes
the ECB for its lack of action".
The higher-yielding Australian dollar also fell sharply,
losing 1.7 percent against the U.S. dollar to $0.6904 <AUD=>,
weighed by risk aversion and falling commodity prices.
"Weakness in the equity markets has generally led to a
weaker tone for the Australian dollar," Bank of America currency
analyst David Powell said.
A weak Australian jobs survey on Monday also pressured the
currency, showing job advertisements slumped to recessionary
levels in December. This added to concerns that unemployment is
set to rise sharply and underlining the case for more interest
rate cuts in Australia [].
Among other news, the Russian central bank staged the latest
in a series of mini-devaluations of its currency as it allowed
the rouble to weaken for the second day running [].
(Reporting by Jessica Mortimer; Editing by Victoria Main)
