* Dollar close to four-week highs against yen
* Higher European bond yields support euro
* Sterling nurses losses after plunge to more than 3 decade low
TOKYO, Oct 6 (Reuters) - 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 Wednesday.
“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 in Melbourne.
“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)