* Dollar eases vs yen after previous day's 1.7 pct bounce
* U.S. factory activity accelerates, highest in two years
* Nonfarm payrolls the next hurdle for U.S. dollar
* Aussie dollar hits fresh 3-year low
By Masayuki Kitano
SINGAPORE, Aug 2 The dollar eased versus the yen
on Friday but held on to the bulk of gains made the previous day
after better-than-expected U.S. data stirred hopes for an upbeat
nonfarm payrolls report.
The dollar slipped 0.1 percent to 99.43 yen after
having surged about 1.7 percent on Thursday, the greenback's
biggest one-day percentage rise against the yen in about four
U.S. data on jobless claims and manufacturing that showed
the world's largest economy was recovering steadily had fuelled
Thursday's rally in the dollar.
Investors are now looking forward to nonfarm payrolls data,
to be released later on Friday, with greater expectations that
July will show a solid increase, which could increase the
likelihood that the Federal Reserve will start scaling back its
monetary stimulus later this year.
A Reuters survey of economists pointed to an increase of
184,000 in nonfarm payrolls. The jobless rate is seen dropping
to 7.5 percent from 7.6 percent.
With expectations already running high, however, analysts
said the dollar could slide if the jobs data were to disappoint.
"I think you have to be careful this time," said Daisuke
Karakama, market economist for Mizuho Bank in Tokyo. "There was
talk in the market yesterday that the number could be about
205,000 or 210,000, so I get the sense that these types of
numbers have already been factored in."
The dollar index, which measures the greenback's value
against a basket of currencies, held steady at 82.313,
having bounced off a six-week low of 81.407 set on Wednesday.
Market positioning is probably tilted toward being long the
dollar, said Satoshi Okagawa, senior global markets analyst for
Sumitomo Mitsui Banking Corporation in Singapore.
"If we get a bad number the dollar might fall sharply," he
The euro inched up 0.1 percent to $1.3214, having
retreated from a six-week high of $1.3345 set on Wednesday.
The outcomes of the European Central Bank and Bank of
England rate reviews on Thursday offered no surprises, with both
central banks leaving their benchmark rates unchanged at 0.5
The ECB said it will keep rates low for an extended period
and could still cut if necessary, while the BoE left investors
waiting for an expected announcement next week of a new strategy
to get Britain's economy back in shape.
The Australian dollar, already on the back foot, dipped to a
fresh three-year low of $0.8889 before recovering a bit
to last stand at $0.8917. It was on track to end the week down
around 3.8 percent.
Analysts in a Reuters poll conducted this week were
unanimous in expecting a quarter point rate cut at Tuesday's
Reserve Bank of Australia policy meeting.
Slower growth in China, Australia's top export market, a
domestic economy that is growing below potential and a tame
inflation outlook mean the RBA has room to lower its cash rate
to a record low 2.5 percent.