FOREX-Yen weaker, high-yielders gain as risk in demand

* Yen weaker, high-yielding currencies up on U.S. jobs data

* Equities rise helps cross/yen, profit-taking tempers gains

* Talk that BOJ will loosen policy weighs down on yen

By Kaori Kaneko

TOKYO, March 8 (Reuters) - The yen was under pressure on Monday while demand for higher-yielding currencies was robust after better-than-expected U.S. jobs data supported optimism about an economic recovery.

The yen fell broadly, with traders citing yen-selling flows from hedge funds. Currencies such as the Australian dollar rose against the yen, getting a boost from a rise in demand for equities .MIAPJ0000PUS and other risky assets.

"The U.S. jobs report last week helped investor anticipation for further recovery in the next employment report and encouraged them to seek risky assets," said Mitsuru Sahara, chief manager of currency derivatives trading at Bank of Tokyo-Mitsubishi UFJ.

The yen was also weighed down by speculation that the Bank of Japan would further loosen its already lax monetary policy soon to address deflationary pressure in the economy. [nECONJP]

"Expectations for more easing steps from the BOJ after a report last week is adding to the reasons for hedge funds to sell the yen, helping yen crosses higher," said Kosuke Hanao, head of Treasury product sales at HSBC in Tokyo.

The yen weakened after the Nikkei newspaper reported on Friday that the BOJ was examining easing again and may decide on such a move when it meets on March 16-17.

Sources familiar with the matter said the BOJ is likely to debate this month easing its ultra-loose monetary policy again. [ID:nTOE6230A7]

Low interest rates mean the yen tends to fall when risk appetite rises and as investors borrow the yen to finance more lucrative trades in other currencies and assets.

The euro rose 0.5 percent against the yen from late U.S. trading on Friday to 123.66 yen EURJPY=R.

The euro hit a two-week high of 123.80 yen on trading platform EBS earlier on Monday, and added to its 1.6 percent jump against the yen logged on Friday.

The dollar also touched a two-week high against the yen of 90.69 yen. After trimming some gains, it was 0.1 percent higher on the day at 90.41 yen JPY=.

EYES ON BOJ POLICY

The most likely next step for the BOJ is to expand the fund-supply operation it put in place in December, under which it lends to banks at 0.1 percent, either by increasing the size from 10 trillion yen or extending the duration of loans from the current three months.

But traders said the market is not expecting the BOJ to come out with any additional easing measures at its policy meeting next week, given that Friday's jobs data has helped provide some respite from yen strength.

If the BOJ were to hint at further loosening steps, foreign players may react by selling the yen, traders said.

But the impact is likely to be short-lived since it would not be a surprise if the BOJ were to signal such an intent, traders said, adding that this kind of stance from the BOJ is likely to be interpreted as a response to strong pressure from the government.

The Australian dollar rose 0.3 percent against the yen to 82.35 yen AUDJPY=R.

"Aussie/yen should lift further over the coming week," said Joseph Capurso, currency strategist at Commonwealth Bank.

"Deflationary pressures are concerning officials in Japan and a further reduction in interest rates or new alternative measures cannot be ruled out."

The euro EUR= rose 0.4 percent to $1.3681 helped at the margins by growing support for debt-laden Greece.

In a bid to calm markets, French President Nicolas Sarkozy promised Greece on Sunday that euro zone countries would help it overcome its financial problems and vowed a crack down on financial speculators Athens blames for its woes. [ID:nLDE6260JZ] Traders say, near term resistance for the euro is seen around $1.3712, its March 4 high.

The dollar index .DXY was 0.3 percent lower at 80.189, with near term support seen around 79.55/60 -- its Feb 17 low -- with the latest data showing currency speculators cutting by more than half their long bets on the U.S. dollar in the week to March 2. [IMM/FX].

The U.S. Labor Department said the economy lost 36,000 jobs in February, leaving the unemployment rate steady at 9.7 percent. Analysts polled by Reuters expected 50,000 job cuts and a 9.8 percent jobless rate. [ID:nN04252324]. (Additional reporting by Anirban Nag in Sydney, Satomi Noguchi in Tokyo; Editing by Joseph Radford)