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FOREX-Dollar up vs yen on Fujii; US jobs data caps gains

Published 01/06/2010, 09:13 AM
Updated 01/06/2010, 09:15 AM
EUR/JPY
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* U.S. private sector jobs data weighs on dollar/yen

* ADP data won't change nonfarm payrolls forecast

* Japan fin minister resignation still factor in yen loss (Recasts, updates prices, adds quote, U.S. data, changes byline, dateline, previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 6 (Reuters) - The dollar rose against the yen on Wednesday, boosted by the resignation of Japanese Finance Minister Hirohisa Fujii, but the greenback's gains were limited by softer-than-expected data on U.S. private sector jobs.

A report from ADP Employer Services showed that U.S. private employers shed 84,000 jobs in December. Although this was lower than the 145,000 jobs lost in November, it was worse than economists' forecast of 73,000 job losses. For more details, click on [ID:nN06134559].

"The ADP number was on the soft side of expectations and we've seen a little softness in the dollar," said Vassili Serebriakov, senior currency strategist, Wells Fargo in New York.

"Clearly, we're still far from seeing jobs growth in the economy. But I don't think this is going to change expectations for payrolls on Friday, with markets expecting a slightly negative to a flat number."

The Labor Department is due to release its nonfarm payrolls report on Friday. The payroll data is expected to shape expectations as to the timing of the Federal Reserve's tightening of policy, which will ultimately determine the direction of the dollar.

Economists on average forecast U.S. job losses of 8,000 for last month, according to a Reuters poll.

In early New York trading, the dollar was up 0.5 percent on the day at 92.13 yen.

The euro rose 0.5 percent to 132.35 yen.

The yen earlier came under pressure after Fujii's resignation. See story [ID:nTKB006647].

Fujii's departure was seen adding to the challenges piling up for the Japanese government as it wrestles with deflation, a fragile economy and huge public debt, although analysts said there would be likely be little impact on currency policy, which is controlled by the finance ministry.

The euro was little changed on the day at $1.4367 . It trimmed its losses after the weaker-than-expected ADP report.

(Editing by Chizu Nomiyama)

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