* Dollar at 10-week high against yen
* Yen faces tough year ahead - Reuters poll
* Private-sector jobs and factory orders rise
* Currency traders await Friday's US jobs reports (Adds dollar gains, Reuters poll, quote and new prices)
By Michael Connor
NEW YORK, April 2 (Reuters) - The dollar touched a 10-week high against the Japanese yen on Wednesday as the greenback rallied on reports signalling U.S. businesses are shaking off a chill on hiring and factory orders from harsh winter weather.
The U.S. dollar index, which had been off for the day before publication of the ADP National Employment Report of private-sector payrolls for March, rose 0.18 percent to 80.236.
The ADP report showing 191,000 private-sector jobs added last month was slightly under forecast but also included an increase in job growth during February.
"The ADP report, especially the upward revision, was read as a USD positive signal" said Bryan Zarnett, currency strategist at Citi.
The index reflected a 0.14 percent gain by the dollar against the yen to 103.77 in late New York trading and hovered near the 104 yen level for the dollar last touched on January 23.
The yen, whose appeal to currency traders as a safe haven is fading, is expected to lose value throughout 2014, according to a Reuters poll published on Wednesday. Median forecasts in the poll suggested a dollar will buy 103 in a month, 106 in a six months and 110 in a year.
The Japanese currency is expected to suffer as persistently low inflation and an economy hurt by a sales tax is likely to force the Bank of Japan to ramp up its own stimulus just as the Fed winds its down.
The ADP report bolstered speculation the Federal Reserve will raise interest rates sooner than expected and optimism about government jobs data due this week.
March U.S. nonfarm payrolls are scheduled for release by the federal government on Friday. Nonfarm payrolls are expected to have increased by 200,000 in March, the largest gain in four months, according to a Reuters poll of economists.
Other data encouraging optimism about America's economy showed new orders for U.S. factory goods had rebounded more than expected in February. Some shipments posted their biggest gain in seven months.
Some currency traders say a strong showing in Friday's payrolls reports will fuel a rally in the greenback.
"Everyone's still waiting for the actual jobs numbers on Friday ...," said Nick Bennenbrock, currency strategist at Wells Fargo Securities in New York.
Major currency pairs have all been stuck in tight ranges since mid-February, with bets for a run higher by the dollar having been thwarted by a combination of nerves over economic slowdown in China and some worse than expected U.S. data.
That has begun to turn around in the past couple of weeks and dealers are beginning to speculate the nonfarm payrolls numbers on Friday may have the potential to turn the dollar sharply higher.
The heart of that argument is the assumption that, should the numbers begin to look more robust, U.S. interest rates will be raised early next year, while those in Europe and Japan will stay flat or be suppressed further.
"When we had that signal from (U.S. Federal Reserve Chair) Janet Yellen that rates could rise early next year, the line for many was that they wanted more confirmation before really betting on it," said a dealer at one large U.S. bank in London.
The euro was off 0.24 percent against the dollar at $1.3760 but is looking more robust than it did a week ago, when it was struck by hints that the Bundesbank's resistance to outright money-printing by the European Central Bank may be fading.
Several ECB officials have since emphasised the temporary nature of current low inflation - 0.5 percent in March - and that has supported expectations the bank will do nothing when it ends its monthly policy meeting on Thursday. (Additional Reporting By Patrick Graham in London; Editing by Peter Galloway and Diane Craft)