* U.S. economy adds 162,000 jobs in March, boost dollar
* Private sector hiring rises to highest since May 2007
* Dollar hits fresh 7-month high vs yen
By Gertrude Chavez-Dreyfuss
NEW YORK, April 2 (Reuters) - The dollar rose broadly, hitting a fresh 7-month high against the yen on Friday, after government data showed the U.S. economy created private sector jobs that were the highest in almost three years.
That report suggests that the U.S. labor sector is on a gradual but steady recovery and should affirm expectations that the Federal Reserve would hike interest rates ahead of the European Central Bank, Bank of England and Bank of Japan.
The Labor department reported that 162,000 new jobs were added to the U.S. economy, lower than market forecasts for a 190,000 gain, but private sector jobs rose to 123,000 to mark the largest since May 2007.
For the report, click on [ID:nN01126422].
"It's a positive jobs report overall. The main take away is that we had more than 120,000 additional private sector jobs and that's a big deal because anything above 50,000 is good for the economy," said Jacob Oubina, senior currency strategist, at Forex.com in Bedminster, New Jersey. "This is is positive for risk and we're seeing dollar/yen gain as a result."
The euro
Against the yen, the dollar rose as high as 94.54 yen, the highest
since late August, according to Reuters data. It was last at 94.43 yen
Dealers said there are options-related barriers near 95 yen, which is serving as strong resistance to the dollar/yen pair.
Sterling dropped 0.6 percent to $1.5197
The ICE Futures' dollar index <.DXY>, a measure of the greenback's value against six major currencies, rose 0.5 percent to 81.197. (Editing by John Picinich)