* Yen down as traders cut long yen positions
* Stocks, commodities support "risk" trades but dlr holds up
* Eyes on U.S. ADP jobs data, Japanese policymaker comments
(Releads, updates prices, adds comment and quotes, changes byline and dateline. Previous: TOKYO)
By Jamie McGeever
LONDON, Dec 2 (Reuters) - The yen weakened broadly on Wednesday as traders took Japan's new monetary policy measures unveiled the previous day, and gains in stocks and some commodities, as signals to sell the ultra low-yielding currency.
The dollar held its ground against most major currencies, however, suggesting the resumption of "risk on" trades across asset markets, supported by receding fears over Dubai's debt problems, was not the sole driver of currencies.
The dollar has been widely considered the funding currency of choice in recent months, as investors have sold the low-yielding unit for other currencies and assets. Asian central banks were said to be buying dollars on Wednesday.
Although many analysts doubt the Bank of Japan's new liquidity measures to combat deflation and keep short-term rates down will slow a fall in dollar/yen for long, the steps have been enough to prompt position squaring and profit taking.
"The measures yesterday are a disappointment. It's more of a monetary policy tool, but if in the process it weakens the yen it will be a good thing" for some in Japan, said Neil Jones, head of FX hedge fund sales at Mizuho in London.
"The big selling flows in dollar/yen and cross/yen last week are drying up somewhat," Jones said, noting good Japanese importer demand for dollars and other currencies and Japanese retail investors buying into higher-yielding foreign assets.
At 0845 GMT the dollar stood at 87.30 yen, up 0.7 percent on the day. Traders said a break above 87.50 yen would trigger pre-placed buy orders and herald a stronger push higher.
The euro was up three quarters of a percent at 131.85 yen and flat on the day against the dollar at $1.5085 after gaining 1 percent and 0.5 percent respectively the previous day.
The single currency was near a recent 16-month high of $1.5145 set on trading platform EBS, with strong trendline support seen at $1.4900 and then at $1.4860.
The dollar index, a measure of its strength against a basket of six currencies, was up 0.2 percent at 74.49, not far above last week's 16-month low of 74.17.
ADP
The BOJ said after an emergency meeting on Tuesday it would provide 10 trillion yen ($115 billion) in three-month funds at a fixed rate of 0.1 percent, relieving government pressure to act against deflation and avert another recession..
The dollar hit a 14-year low of 84.82 yen last week as concerns over debt problems in Dubai saw investors unwind risk trades funded by the yen, pushing the Japanese currency up.
Tuesday's decision was seen as a way to avoid a return to a narrow form of quantitative easing, under which the BOJ slashed rates to zero and flooded markets with cash in 2001-06.
Traders and analysts were keen to hear the outcome of a meeting between Prime Minister Yukio Hatoyama and Bank of Japan Governor Masaaki Shirakawa expected later on Tuesday.
Hatoyama was quoted as saying on Tuesday that the yen's rise could not be left "as is", Nikkei said, but a spokesman later said Hatoyama was not talking about currency intervention.
Markets will be watching U.S. data later, ahead of monthly jobs numbers due on Friday. A November employment report by Automatic Data Processing at 1315 GMT is expected to show 155,000 jobs lost in the month after 203,000 lost in October.
"We think that the data will disappoint but, at the same time, do not feel that the numbers are much of a game-changer for the dollar or the bond/stock markets right now," said Steve Barrow, head of strategy at Standard Bank in London, in a note.
"If anything, the unemployment rate is of more significance than payrolls and the ADP report given that the market is well aware that the Fed has not tended to start tightening before the unemployment rate has peaked," he said.
Attention also turns to Thursday's European Central Bank policy meeting. The ECB is expected to keep its 1 percent refi rate on hold but give guidance on the timing and extent of how it intends to withdraw generous liquidity stimulus.
((Reporting by Jamie McGeever; editing by Nigel Stephenson; Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net; +44 207 542 8510))