* Sterling plummets through key support levels, triggers
* Traders cite "hard" Brexit worries but no clear triggers
* Stocks edge lower ahead of U.S. nonfarm payrolls data
* Disorderly reaction to U.S. rate hike may lead to outflows
* Treasury yields consolidate after recent rise
By Saikat Chatterjee and Hideyuki Sano
HONG KONG/TOKYO, Oct 7 Sterling recouped some
losses after plunging to a three-decade low in early Asian trade
on Friday as a break of key technical support levels triggered a
wave of stop-loss selling, though the broader global market
impact was limited with stocks only slightly down.
The pound nosedived by almost 10 percent at one point to
$1.1378 but quickly bounced.
By midmorning it had steadied at around $1.2362, still down
2 percent from late U.S. levels and leaving traders scratching
their heads in the absence of any major news overnight.
"This was even a bigger move than what we saw after the
Brexit vote. There was almost no offer, no bids when this
happened," said a trader at a European bank in Tokyo.
The pound has been under renewed pressure on fears of a
"hard" exit by Britain from the European Union after UK Prime
Minister Theresa May set a March deadline for the formal
departure process from the EU to begin.
"The whole thing's been on a precipice since Sunday, since
Theresa May (pointed to) March Brexit negotiations, but the
selling has been very substantial so you can only think its been
part of that general punishment of the pound for Brexit," said
Sean Callow, senior currency strategist at Westpac in Sydney.
"I think we've underestimated how many people had money
positions for a very wishy-washy Brexit or even none. May's
comments have really just started the cleanout and we just
haven't seen any sign of bouncing."
While the move broadly coincided with some news reports that
Britain's exit from the eurozone may be a tough process, some
traders blamed it on a possible a "fat finger" error triggering
the automatic stop-loss orders.
"A few stops got triggered in early trading and once cable
broke 1.20, option barriers sent it lower," said Gerrard Katz,
head of Asian FX sales and trading at Scotiabank said. "The
broader market impact has been limited and cable should
consolidate between the 1.20 and 1.25 levels."
Britain's finance minister Philip Hammond tried to reassure
jittery markets on Thursday, saying the UK economy was
fundamentally strong, but he acknowledged that next year will be
Elsewhere in currency markets, the dollar edged down 0.3
percent against the yen to 103.66 after hitting its
highest level in a month on Thursday. The euro eased 0.2 percent
to $1.1128, poised to shed 1 percent for the week.
The greenback held firm after data on Thursday showed the
number of Americans filing for unemployment benefits
unexpectedly fell last week to near a 43-year low, boding well
for Friday's closely-watched payroll data.
In stocks, Asian shares dipped but held not far from the
14-month high touched last month ahead of the U.S. jobs report
later in the day, with MSCI's broadest index of Asia-Pacific
shares outside Japan down 0.2 percent and
Japan's Nikkei falling 0.2 percent.
Strong U.S. jobs numbers could cement expectations of a
Federal Reserve rate increase later this year and ripple through
markets. Economists polled by Reuters forecast nonfarm payrolls
to increase by 175,000.
A disorderly reaction to possible U.S. interest rate hikes
could disrupt capital flows and heighten asset price volatility
in Asia, the International Monetary Fund said on Thursday.
Interest rate futures are now pricing in about 65 percent
chance of a rate hike by December, compared to less than 50
percent late last month.
The 10-year U.S. Treasuries yield hit a three-week high of
1.746 percent on Thursday before easing slightly to
1.73 percent on Friday.
Gold hits 3 1/2-month low of $1,250 per ounce, having
declined five percent on the week. It last stood at $1,258.8.
Silver fell more than 10 percent so far this week to hit
a four-month low of $17.1525 per ounce.
Oil prices continued to climb, with U.S. crude breaking
through $50, spurred by an informal meeting among the world's
biggest producers on output cuts and falling U.S. crude
U.S. crude futures stood at $50.47 per barrel, just
below Thursday's four-month high of $50.63.
(Additional reporting by Cecile Lefort in SYDNEY; Editing by
Eric Meijer and Kim Coghill)