* Euro supported as market awaits U.S. jobs data
* Better-than-forecast number could see euro rally
* Yen edges higher after BoJ keeps policy unchanged
By Nia Williams
LONDON, Oct 5 The euro hovered near a two-week
high versus the dollar on Friday after the European Central Bank
reiterated it was ready to buy bonds to tackle the debt crisis,
with further gains seen dependent on U.S. jobs data later in the
A better-than-expected U.S. non-farm payrolls number,
released at 1230 GMT, could soothe concerns about the health of
the world's largest economy and fan demand for perceived riskier
currencies against the safe haven dollar.
A Reuters consensus forecast showed market players were
expecting 113,000 jobs to be added.
"Today if we see a good U.S. number, say above 160,000, that
would be bullish for risk and bearish for the dollar," said
Daragh Maher, currency strategist at HSBC.
The euro was down 0.1 percent at $1.3003 but held
within sight of Thursday's two-week peak of $1.3032. Strategists
said there was resistance around $1.3172, the September high.
ECB President Mario Draghi said on Thursday that everything
was in place for the central bank to buy the bonds of struggling
euro zone countries like Spain and that conditions linked to it
need not be punitive.
But Draghi, speaking after the ECB left interest rates
unchanged at a record low 0.75 percent, offered no clues as to
when Spain might make a formal aid request that would activate
Market players said traders seemed to be looking to sell the
euro on rallies but were wary of doing so ahead of a Spanish aid
request. If Spain asks for a bailout it would be likely to lift
investor appetite to take on risk and boost the euro.
"People who want to go short are looking to do so after a
Spanish request for aid triggers a rally in the euro," the
trader said, referring to traders who are eager to put on trades
against the single currency.
The euro has also been supported by investors buying it back
against currencies such as sterling and the
Australian dollar, traders said.
The euro eased 0.2 percent against the Australian dollar to
A$1.2679 but remained close to a four-month high of A$1.2718 hit
BOJ STAYS ON HOLD
The yen briefly nudged higher after the Bank of Japan kept
monetary policy unchanged and held off from additional easing
measures. The reaction was limited, however, as Friday's
decision was in line with expectations.
The dollar dipped to an intraday low of 78.27 yen
following the BoJ's announcement, but later pared losses to
trade at 78.38 yen, down 0.1 percent on the day.
Although the BOJ's decision to keep policy unchanged was
expected, the yen rose as there had been a risk the central bank
might surprise with more easing. Japanese officials have
expressed concerns about the strength of the yen.
"The Bank of Japan didn't move too long ago, but I think
since then, there's almost been an expectation that central
banks are going to keep on pushing on the monetary levers," said
Mitul Kotecha, head of global FX strategy for Credit Agricole in
Traders said the dollar would probably find support from
buyers at 78.00 yen, while the resistance came in at the 100-day
moving average around 78.83 yen.
The euro dipped 0.2 percent against the yen to 101.91
, retreating from a two-week high of 102.27 hit earlier
in the session.
(Additional reporting by Masayuki Kitano/editing by Chris
Pizzey, London MPG Desk, +44 (0)207 542-4441)