* Investors wary of further BOJ easing, intervention
* ECB eyed for liquidity, growth comments
* U.S. private sector shed 169,000 jobs in November
* ECB policy meeting, U.S. nonfarm payrolls loom (Updates prices, adds comment, detail)
By Wanfeng Zhou
NEW YORK, Dec 2 (Reuters) - The dollar rose against the yen on Wednesday after Japanese Prime Minister Yukio Hatoyama said the yen's rise cannot be left "as it is" and on speculation the Bank of Japan may take additional easing measures.
The euro slipped against the dollar in choppy trading ahead of a policy meeting on Thursday of the European Central Bank, which is expected to announce details of how and when it will remove generous liquidity from the system. The ECB could also upgrade its economic growth forecasts.
A clear signal from the ECB about stimulus withdrawal could curb risk appetite. For scenarios story, see [ID:nGEE5B12A1].
Japan's Hatoyama on Wednesday said it was unclear if the yen's recent rise was temporary but it could not be left "as it is," the Nikkei business newspaper reported on its website. Japan's Chief Cabinet Secretary Hirofumi Hirano downplayed Hatoyama's remarks and said they were not a comment about currency intervention. See [ID:nGEE5B10H2] [ID:nTKU105721].
The Bank of Japan's measures unveiled on Tuesday to combat deflation and keep short-term interest rates down also prompted investors betting on a stronger yen to square positions.
There are "concerns about the risk of further quantitative measures from the Bank of Japan or even intervention, which were exacerbated by the (PM) comments overnight and by the Bank of Japan's policy announcement yesterday," said Daniel Katzive, currency strategist at Credit Suisse in New York. "That's made the market a little bit nervous."
In midday trading, the dollar rose 0.7 percent to 87.26 yen
A BOJ policymaker signaled on Wednesday the Japanese central bank was open to adopting more measures to support the economy following its emergency meeting the previous day that offered extra short-term funding. See [ID:nT182340]
The BOJ move "suggests a commitment on the part of BOJ officials to maintain an ultra-accommodative policy stance for the foreseeable future," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington. "It (also) hints that officials are somewhat closer to potentially intervening in the market if yen appreciation continues at the current pace."
ECB, PAYROLLS LOOM
The dollar index <.DXY>, which measures the greenback against a basket of six other major currencies, was up 0.3 percent on the day at 74.580, not far above last week's near 16-month low of 74.170.
The euro rose 0.5 percent to 131.37 yen
A senior International Monetary Fund official said on Wednesday the euro was on "the strong side" against the dollar, echoing a view expressed in an IMF report the previous day. [ID:nGEE5B11N8]
Earlier, a report showed the U.S. economy shed 169,000 private-sector jobs in November. While that was fewer than the 195,000 lost in October, it was higher than an economists' forecast for a loss of 155,000. For more see [ID:nWEN7048].
"ADP is worse than expected, so it could be a negative for risk appetite," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.
"But I have to think that with the ECB tomorrow and U.S. payrolls on Friday, we're not going to be going very far today," he added. "There's a risk (Jean-Claude Trichet) is more explicit about stimulus withdrawal, and that would be a problem for the risk trade."
The government is slated to release U.S. November nonfarm payrolls data on Friday.
Credit Suisse analyst Katzive said the dollar also gained versus the yen on speculation a strong jobs report would lift U.S. short-term yields higher.
But overall, the dollar remains "pretty vulnerable," he said, and if the jobs data doesn't succeed in pushing front-end U.S. yields higher, "then the dollar is probably going to remain under pressure into the year-end."
(Additional reporting by Steven C. Johnson; Editing by Andrew Hay) ((wanfeng.zhou@thomsonreuters.com; +1 646 223 6304; Reuters Messaging: wanfeng.zhou.reuters.com@reuters.net))