* Euro under pressure, but holding above last week’s post-ECB lows
* EUR/USD downtrend still seen intact on diverging monetary policies
* China to unveil reform agenda for next 10 years
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, Nov 12 (Reuters) - The dollar rose to a more than seven-week high against the yen in Asia on Tuesday, coasting on heightened expectations that the U.S. Federal Reserve will reduce its stimulus after last week’s bullish jobs data.
Speculation that the Fed might soon taper its $85 billion-a-month bond-buying programme sooner rather than later rose after U.S. employers added more than 200,000 new jobs last month. A Reuters poll of U.S. primary dealers - the large financial institutions that do business directly with the Fed - showed more of them see the central bank rolling back some of its asset purchases before March.
Markets were subdued after partial market holidays in various centres around the world to observe Armistice day on Monday.
“The main story today is broad-backed U.S. dollar strength, led by dollar/yen, with good demand out of Tokyo behind it,” said Sue Trinh, a senior currency strategist at RBC Capital Markets in Hong Kong.
“Dollar/yen’s upward march back toward the 100 level seems to be the main focus of our session,” she said. The dollar last traded above 100 yen on Sept. 11, according to Reuters data.
The dollar rose as high as 99.59 yen, its highest since Sept. 20, and was last up about 0.4 percent at 99.55 yen.
The euro erased its earlier modest gains but held above lows set last week, when it suffered a heavy selloff on Thursday after the European Central Bank cut its main rate to a record-low 0.25 percent.
The common currency shed about 0.1 percent to $1.3397 but remained above Monday’s low of $1.3343, according to Reuters data, and well above its two-month low of $1.3295 hit on Thursday.
It is still about 3 percent below a two-year peak of $1.3833 set last month.
The euro’s recovery off its lows, and any bounces higher, offer potentially good opportunities to enter new short positions in the common currency against the dollar and sterling, as well as versus the higher-yielding commodity bloc currencies, analysts at BNP Paribas wrote in a client note.
With the Fed poised to taper its stimulus and the ECB committed to easy policy for now, analysts expect diverging monetary outlooks in the U.S. and Europe to keep pressure the euro against the dollar.
The dollar index rose about 0.1 percent to 81.174, moving back towards its nearly two-month peak of 81.482 struck on Friday.
In Asia, investors will be keeping an eye on China where the country’s leaders are slated to unveil a reform agenda for the next decade on Tuesday, as it seeks to boost economic growth while preserving stability.
The Australian dollar was down about 0.3 percent at $0.9335 after a measure of Australian business confidence pulled back from 3-1/2-year highs in October as sales and profits stayed subdued.