* U.S. payrolls show unexpected drop in September
* Dollar falls below 82 yen to 15-year low
* Fed's Bullard says more easing not obvious case (Adds details, updates prices)
NEW YORK, Oct 8 (Reuters) - The U.S. dollar slid to a 15-year low below 82 against the Japanese yen on Friday after a report showed an unexpected drop in U.S. payrolls in September.
The report bolstered the expectation for further asset purchases from the U.S. Federal Reserve and the reaction against the yen was immediate, with the dollar falling to a low of 81.72 yen on electronic trading platform EBS. For job report details click [ID:nLLA8LE65O].
The dollar also fell sharply against the euro on the jobs data, but it later recovered some of those losses after Eurogroup Chairman Jean-Claude Juncker said he was not happy with the euro's move to $1.4000, a level surpassed on Thursday.
"The overall change (in payrolls) is really bad and is probably enough to convince the Fed to engage in quantitative easing," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "Most are pricing in some $500 billion of easing, and I don't think this really changes that. I think the Fed still intervenes."
The dollar was last at 81.82 yen on electronic trading
platform EBS
Investors remained on full alert for intervention by the Bank of Japan to weaken the yen, given it is trading at levels stronger than the 82.87 level where the central bank stepped in on Sept. 15.
"There was no sign of the Bank of Japan in the market yet, but there's strong support below the 82 yen level and I wouldn't be surprised to see it bounce if it dips below 82 again today," said Greg Salvaggio, vice president for trading at Tempus Consulting in Washington.
Japanese Prime Minister Naoto Kan said Japan would take decisive steps on the strong yen if needed, but added that it also wanted to cooperate with the G7 and other countries. [ID:nTOE69700W]
EURO FALL
Investors are also wary in case the G7 and IMF meetings starting in Washington on Friday produce a surprise in the form of a coordinated front on currencies, as calls have mounted for global efforts to avoid competitive currency devaluations.
The euro was last up 0.1 percent against the dollar at
$1.3933
The euro exchange rate against the dollar is too strong at $1.40, as the dollar does not reflect the economic fundamentals of the United States, Juncker said on Friday ahead of the meeting of finance ministers and central bankers of the Group of Seven most industrialized countries.
"Juncker has turned the market with comments about how he's not happy with the euro reaching $1.40,' said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. "This adds to concern about competitive devaluations, particularly since foreign exchange will be discussed at official IMF meetings this weekend."
St. Louis Fed chief James Bullard, a voting member this year on the U.S. Federal Reserve's rate-setting committee, told CNBC that policymakers face a tough decision at next month's policy meeting as the economy has slowed but is still bumping along. [ID:nN08192815]
Market speculation has increased that the Fed will resume quantitative easing when it meets on Nov. 2-3 to shore up the economy.
Bullard did not rule this out, saying more help may be needed to push up inflation.
The dollar index, a non-traded calculation of the dollar's
performance against a basket of six other major currencies, was
down 0.1 percent at 77.266 <.DXY>, above an 8-1/2 month low of
76.906 touched on Thursday. It has support at 76.60, the index
low for 2010 hit in mid-January.
(Additional reporting by Vivianne Rodrigues and Steven C
Johnson in London and Jessica Mortimer in London)
(Reporting by Nick Olivari; Editing by Dan Grebler)