* Dollar close to four-week highs against yen
* Higher European bond yields support euro
* Sterling nurses losses after plunge to more than 3 decade
TOKYO, Oct 6 The dollar stood tall against the
yen on Thursday in early Asian trading and was steady against
other rivals ahead of this week's nonfarm payrolls report that
could reinforce expectations that the U.S. Federal Reserve will
hike interest rates by December.
Underpinning the dollar, Chicago Fed President Charles Evans
said he would be "fine" with raising U.S. interest rates by
year-end if U.S. economic data remained firm.
On the economic data front, upbeat U.S. services sector
activity offset a weaker-than-expected report on private-sector
job growth ahead of Friday's jobs report.
The employment report is expected to show 175,000 jobs were
added last month, according to the median estimate of 100
economists polled by Reuters.
Market participants will also look for any upward revision
to August's weaker-than-expected gain of 151,000 jobs.
The dollar was buying 103.52 yen, steady on the day
and not far from a four-week high of 103.57 yen touched on
"I suspect we see dollar/yen trade into the 2 Sept high of
104.32 and from here it will be important to see how price
reacts. A daily close above this prior high would add to bullish
conviction," wrote Chris Weston, chief market strategist at IG
"A good U.S. payrolls report on Friday should see the market
placing a 70 percent chance of a December hike," he added, from
around 60 percent as of Wednesday.
Traders were pricing in less than a 20 percent chance that
the Fed would raise interest rates as early as November,
according to CME Group's FedWatch program.
The euro was also steady at $1.1206, supported by
higher European bond yields on concerns the European Central
Bank might taper the pace of bond-buying before its asset
purchase programme ends.
A Bloomberg article on Tuesday cited sources as saying the
ECB would likely gradually wind down its monthly 80-billion euro
($90 billion) programme, spooking investors even though a
central bank media officer later tweeted that tapering was not
an ECB discussion topic.
The dollar index, which tracks the U.S. unit against a
basket of six major currencies, was slightly higher at 96.153
, but shy of last week's high of 96.442, which was its
highest since Aug. 9.
Sterling edged up 0.1 percent to $1.2751 after
falling as low as $1.2686 on Wednesday, its weakest level in
more than three decades on fears of the impact of Britain's
impending exit from the European Union.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam)