* Nonfarm payrolls rose 165,000 in April, jobless rate at 4-year low * Dollar on pace for biggest one-day rise in two weeks vs yen * Euro finds support at $1.3050 area, remains vulnerable By Wanfeng Zhou NEW YORK, May 3 The dollar surged more than 1 percent against the yen on Friday after surprisingly strong U.S. April jobs data fueled optimism the U.S. economy may be more resilient than some had feared. U.S. employment rose more than expected in April, with nonfarm payrolls rising 165,000, while job increases for the previous months were revised higher. The unemployment rate fell to a four-year low of 7.5 percent. The dollar had come under pressure lately after disappointing economic news prompted investors to pare back expectations the Federal Reserve may taper its bond purchases, known as quantitative easing, any time soon. "No spring swoon," said Alan Ruskin, head of G10 FX strategy at Deutsche Bank in New York. "The data in one swoop puts a reduction of Fed QE purchases firmly back on the table for the second half of this year. "The data is very solidly U.S. dollar-positive, but probably not enough to prompt an immediate assault" on the 100 yen level for dollar/yen, he said. The dollar rose 1.1 percent to 99.03 yen, on pace for its biggest one-day rise in two weeks, after hitting a session peak of 99.26 yen, according to Reuters data. The dollar hit a four-year high of 99.94 yen on April 11, but its rally stalled ahead of resistance and option barriers around 100 yen. Dean Popplewell, chief currency strategist at OANDA in Toronto, said more positive U.S. data in the coming weeks could push the dollar to breach the 100 yen level. "After a month of struggling to break the psychological 100 yen barrier, the bears must now feel more confident after Friday's nonfarm payrolls print that another positive U.S. data print over the next two weeks could finally prove to be the catalyst that allows the market to punch through this imaginary barrier," he said. The dollar's rally lost some momentum after separate data showed the pace of growth in the vast U.S. services sector slowed in April to its weakest in nine months, while U.S. factory orders fell sharply in March. The Fed said on Wednesday after its policy meeting it will continue buying $85 billion in bonds each month to keep interest rates low and spur growth, and would step up purchases if needed to protect the economy. EURO VULNERABLE The euro rose 0.4 percent to $1.3110, rebounding after finding support in the $1.3050 area. It had hit a session low of $1.3033 in the wake of the U.S. jobs data. Traders said the euro failed to move further below $1.3050, leading to an intraday rebound. Sentiment on the euro remained negative, analysts said, after European Central Bank President Mario Draghi said Thursday the bank was technically ready for negative deposit rates and noted downside risks to the economy. A negative deposit rate would penalize banks for hoarding cash and could drive money out of the euro zone. "Putting the deposit rate into negative territory comes at a significant cost, undermining especially money market fund flows into weaker peripheral banks," Morgan Stanley said in note. "Bearing these costs in mind and (ECI chief Mario) Draghi showing his readiness to use the negative deposit rate anyway is one of the clearest indications that the ECB wants a weak exchange rate." ECB policymakers on Friday played down prospects of the bank cutting its deposit rate below zero any time soon, saying it was just one of several possible treatments for the sickly euro zone economy. Ewald Nowotny, a member of the central bank's policymaking Governing Council, said the possibility of negative deposit rates was part of "open-minded" ECB policy discussions but "not something that will lead to a short-term result." Against the yen, the euro rallied 1.6 percent to 129.99 yen , on track for its best one-day gain since April 16. The dollar's losses against the euro helped drag it lower on an index basis, with the dollar index last trading at 82.096, down 0.2 percent on the day.