NEW YORK, Dec 2 (Reuters) - The dollar rose against the yen on Wednesday after Japanese Prime Minister Yukio Hatoyama said the yen's rise could not be left "as it is" and on speculation the Bank of Japan may take additional easing measures.
The euro held steady ahead of a policy meeting on Thursday of the European Central Bank, which is expected to announce details of how and when it will remove generous liquidity from the system. The ECB could also upgrade its economic growth forecasts.
Hatoyama said on Wednesday it was unclear if the yen's recent rise was temporary but that it could not be left "as it is," the Nikkei business newspaper reported on its website.
Japan's Chief Cabinet Secretary Hirofumi Hirano said Hatoyama's comments on the yen's rise were not a comment about currency intervention. See [ID:nGEE5B10H2] [ID:nTKU105721].
The Bank of Japan's measures unveiled on Tuesday to combat deflation and keep short-term interest rates down also prompted investors betting on a stronger yen to square positions and take profits.
There are "concerns about the risk of further quantitative measures from the Bank of Japan or even intervention, which were exacerbated by the (PM) comments overnight and by the Bank of Japan's policy announcement yesterday," said Daniel Katzive, currency strategist at Credit Suisse in New York. "That's made the market a little bit nervous."
In morning trading, the dollar stood at 87.32 yen JPY=, up 0.7 percent on the day and pulling further away from a 14-year low of 84.82 yen hit on electronic trading platform EBS last week. Traders said a break above 87.50 yen would trigger pre-placed buy orders and herald a stronger push higher.
The euro was up 0.7 percent at 131.67 yen EURJPY= but was little changed against the dollar EUR= at $1.5079. The euro zone single currency hit a near 16-month high of $1.5145 on EBS last week.
A senior International Monetary Fund official said on Wednesday the euro was on "the strong side" against the dollar, echoing a view expressed in an IMF report the previous day. [ID:nWEA4017]
Earlier, a report by ADP Employer Services showed the U.S. economy shed 169,000 private-sector jobs in November. While that was fewer than the 195,000 lost in October, it was higher than an economists' forecast for a decline of 155,000.
The government releases U.S. November nonfarm payrolls data on Friday. For more see [ID:nWEN7048].
"Overall, ADP is worse than expected, so it could be a negative for risk appetite," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "But I have to think that with the ECB tomorrow and U.S. payrolls on Friday, we're not going to be going very far today." (Additional reporting by Steven C. Johnson in New York and Jamie McGeever in London; Editing by Padraic Cassidy) ((wanfeng.zhou@thomsonreuters.com; +1 646 223 6304; Reuters Messaging: wanfeng.zhou.reuters.com@reuters.net))
