* Dollar looks vulnerable against yen, near 15-yr low
* Euro hits 3-wk highs vs dlr but capped around $1.2920
* Risk currencies supported after U.S. payrolls data
(Adds quotes, updates prices)
By Tamawa Desai
LONDON, Sept 6 (Reuters) - The dollar dipped on Monday and
looked set to test a 15-year low against the yen after shedding
gains made after U.S. jobs data, while greater appetite for risk
prodded the euro to a three-week high versus the U.S. currency.
U.S. payrolls data last week, which showed far fewer jobs
lost than expected, eased market anxiety over the chances of a
global slowdown and boosted demand for growth-linked currencies
such as the Australian dollar. Equity markets also rose.
"Risk sentiment is a little bit better, building on gains
from Friday," said Adam Cole, global head of FX strategy at RBC
Capital Markets.
The euro rose to $1.2918, its highest since Aug. 12, helped
by Asian central banks, excluding Japan, converting dollars into
euros after they intervened to rein in gains in their own
currencies against the greenback, traders said.
Trade was subdued with U.S. markets closed for the Labor Day
holiday. By 1110 GMT, the euro was slightly lower at $1.2876, as
intraday players closed long positions after gains were capped
by offers from semi-official names around $1.2920, traders said.
Stops were seen through $1.2865, they said.
U.S. non-farm payrolls fell 54,000, a much smaller drop than
the predicted 100,000. Private employment, considered a better
gauge of labour market health, increased 67,000. []
The dollar index <.DXY> was flat from late Friday U.S.
trade at 82.10. Support was seen at 81.82 -- the 50 percent
Fibonacci retracement of the index's rise from 80.085 to a high
of 83.559, in August.
YEN LONG POSITIONS TRIMMED
The dollar also ceded ground against the yen, dropping 0.1
percent to 84.22 yen <JPY=>, not far from a 15-year low of 83.58
hit last week. It had risen to 85.23 after the U.S. jobs data,
but quickly erased the gains.
The pair has been highly correlated with U.S. bond yields.
In the past month, the yield on the benchmark 10-year U.S.
Treasury note <US10YT=RR> has shed 12 basis points, while
dollar/yen has fallen more than 1.5 percent in the period.
On Friday, the dollar did not make much headway versus the
yen even as payrolls pushed U.S. yields sharply higher, with a
spike in Japanese bond yields partly offsetting the rise.
Japanese exporter offers also capped gains in the dollar,
with sell orders in the 84.50-85.00 yen region, traders said.
Speculators trimmed their long positions on the yen last
week but still have big yen long positions, data from the U.S.
Commodity Futures Trading Commission showed on Friday. []
Hedge funds were selling dollar/yen while other asset
managers were emerging as bit buyers, said Gareth Berry,
currency strategist at UBS.
On Saturday, Japanese Finance Minister Yoshihiko Noda said
Tokyo would take decisive steps to stem the yen's rise when
needed while suggesting coordinated currency intervention in the
market was a difficult option. [].
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PDF on Japan yen dilemma: http://r.reuters.com/nef47n
Q+A-Will Japan intervene to curb yen rise?: []
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"For intervention to work, it has to be coordinated and it
does not look that the U.S. is prepared for that," said Bilal
Hafeez, foreign exchange strategist at Deutsche Bank.
"So going solo by the Japanese authorities could work for a
day, but unlikely beyond that. We are looking for the dollar/yen
to fall to 80 yen in the medium term."
(Additional reporting by Anirban Nag)
