* Dollar rises vs yen, euro after U.S. jobs report
* Payrolls fall 216,000, smallest decline in a year
* Unemployment rate rises to 9.7 pct, highest in 26 years
* Canadian dollar rallies after Canadian employment data
(Adds details, updates prices, changes byline)
By Nick Olivari
NEW YORK, Sept 4 (Reuters) - The yen fell on Friday after
news that U.S. employers cut fewer jobs than expected in
August, reinforcing recent data pointing to an economic
recovery and dimming safe-haven demand for the Japanese
currency.
Major currencies see-sawed earlier as traders said the jobs
data was a mixed bag, with light trading ahead of the U.S.
Labor Day holiday adding to volatility.
The U.S. economy cut 216,000 jobs in August, while the
unemployment rate rose to 9.7 percent, the Labor Department
said on Friday. Analysts had expected nonfarm payrolls to drop
by 225,000 and the unemployment rate to rise to 9.5 percent.
For more see [].
"I think it's a little bit mixed in terms of the number and
that's fairly evident from the market's reaction afterwards,"
said Camilla Sutton, senior currency strategist at Scotia
Capital in Toronto.
"On the one side is that the unemployment rate climbs
significantly higher and that just keeps fears alive that the
unemployment rate is still moving higher and will remain high
for a longer period of time. However, the payrolls number ...
shows that the pace of job losses has declined," she added.
In midafternoon trading in New York, the dollar was up 0.4
percent against the yen at 92.98 yen <JPY=>, after hitting a
session low of 92.26 yen.
The euro rose 0.4 percent to $1.4313 <EUR=>, near the
session high of $1.4327, and against the yen was up 0.8 percent
at 133.10 yen <EURJPY=R>.
"When the dust settles on nonfarm payrolls, it's positive
for the high yield currencies by boosting risk appetite," said
Kathy Lien, director of currency research at GFT Forex.
The yen also fell against other major rivals, with sterling
up 0.8 percent <GBPJPY=> and the Australian dollar up 1.8
percent <AUDJPY=>.
The dollar fell 0.3 percent against the yen over the last
five trading sessions, its fourth straight weekly decline. It
has lost 4.8 percent in the last four weeks. It lost 6.1
percent in the four weeks to July 12.
For the week. the euro was little changed against the
dollar.
CANADIAN DOLLAR RALLIES
The August payrolls number followed U.S. data on the
manufacturing and sectors earlier this week, supporting the
view that the recession is coming to an end, although the
outlook for a recovery remained uncertain.
"The economy needs to generate jobs, and until we get near
zero or go positive, it's still a tremendous drag on the
economy," said Joseph Trevisani, senior market analyst at FX
Solutions in Saddle River, New Jersey. "The evidence of what's
going on is that we're seeing only a very slow change."
Uncertainty about the global economy may lead to a pullback
in risk-seeking, benefiting the dollar and yen in the coming
months, said Brian Kim, currency strategist at UBS in Stamford,
Connecticut.
Scotia's Sutton said the price of gold is providing
interesting indications of risk appetite. "There's been a
dramatic move higher in gold," she said. "There're many who
think that's really indicating that risk aversion is about to
jump higher, which would be bad for equities and good for the
U.S. dollar."
The Canadian dollar rallied, with the U.S. currency falling
1.6 percent to C$1.0850 <CAD=>, according to Reuters data,
buoyed by an unexpected rise in employment in Canada in August.
[]
Investors also looked ahead to a meeting in London this
weekend of finance ministers from the Group of 20 rich and
developing nations. G20 policymakers will promise to keep
economic support packages in place until recovery is certain.
[]
(Additional reporting by Steven C. Johnson and Wanfeng Zhou;
Editing by James Dalgleish)
