RPT-FOREX-Yen dips, dollar supported ahead of payrolls

* Asian shares rise, helping cross-yen climb

* Dlr/yen up on short-covering before U.S. payrolls

* Yen dented by report saying BOJ to consider easing steps (Repeats to fix formatting)

By Satomi Noguchi

TOKYO, March 5 (Reuters) - The yen slipped on Friday as Asian shares climbed and China reaffirmed its easy monetary stance, leading short-term players to buy higher-yielding currencies.

The dollar rose against the yen and was supported versus other major currencies as investors grew cautious about selling the greenback too far on the view that some may previously have been too pessimistic ahead of U.S. payroll numbers due later in the day.

The dollar's move up against the Japanese currency was helped by a report that the Bank of Japan was weighing further easing measures, traders said. [ID:nTOE6230A7]

China's key stock index opened higher on Friday after Premier Wen Jiabao said China would stick to an appropriately easy monetary stance and a proactive fiscal policy. [ID:nTOE62308M]

"Wen Jiabao's remarks reassured the market that China only wants to rein in certain sectors, and that it does not intend to put a strong brake on the economy," said Nobuhiko Akai, senior manager of Bank of Tokyo-Mitsubishi UFJ's forex trading group.

Hong Kong and China stocks fell on Thursday as persistent concern over policy tightening spurred investors to take profits and prompted short-term players to cut risky positions in higher-yielding currencies for the yen for its perceived safety.

The dollar rose 0.3 percent on the yen from late on Thursday in New York to 89.28 yen <JPY=>, recovering from a 3-month low of 88.14 yen struck on trading platform EBS the previous day.

Traders said the dollar's upside will likely be capped around 89.50 yen, or the lower limit of the cloud on the daily Ichimoku chart, before the U.S. jobs report.

The interbank cost of borrowing three-month dollar funds edged higher on Thursday, while it fell for yen funds, taking the Japanese currency rate below that of the greenback for the first time since August. [ID:nLDE6232F8]

Some traders said that drop in three-month yen Libor may have been another reason for the yen's weakness against the dollar in late Thursday trade.

The euro remained on the defensive as a short squeeze in the single currency appeared to have run its course, with investors fretting about debt-laden Greece and Moody's cutting Deutsche Bank's ratings. [ID:nN04142093]

The euro stood at $1.3592 <EUR=>, edging up 0.1 percent. It recovered a tad from its 0.8 percent loss the day before when it moved in choppy trade following a robust response to a Greek debt auction.

The euro gained 0.3 percent to 121.33 yen <EURJPY=R> and the Australian dollar rose 0.2 percent to 80.39 yen <AUDJPY=R>. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Insider daily forex comment http://link.reuters.com/maw33j ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

JOBS DATA

Traders said the market was likely to stay cautious ahead of key U.S. payrolls data. Forecasts are for a cut of 50,000 jobs, but many analysts warned the data was distorted by a wave of snowstorms that hit the United States <ECON>.

"Weather is really the X-factor there and the data could throw up anything," said Jonathan Cavenagh, currency strategist at Westpac.

"The market is bearish on the numbers, so any upside surprise could actually lift the U.S. dollar. Also, Greece worries continue and with investors still cautious about risk, I would have a bias towards the U.S. dollar ahead of the payrolls data."

The dollar index <.DXY> was steady at 80.52, with near-term resistance seen around 81.30, this week's high.

Investors also fretted about whether Greece's fresh plans to address its debt woes would win wider support in the European Union ahead of a meeting of German Chancellor Angela Merkel with the Greek prime minister later on Friday. [ID:nLDE623296]

Greece announced plans on Wednesday for a further $6.5 billion in public sector pay cuts and tax hikes to whittle its budget deficit. (Additional reporting by Anirban Nag in Sydney, Kaori Kaneko in Tokyo; Editing by Hugh Lawson)