By Dominic Lau
TOKYO, July 8 (Reuters) - Japanese shares rose on Monday and
the dollar hit a three-year high against a basket of major
currencies after U.S. job creation accelerated in June,
signalling growth in the world's largest economy is gathering
U.S. employers added 195,000 new jobs to their payrolls last
month, beating expectations of 165,000. Adding to the positive
sentiment, the figures for April and May were revised up by a
combined 70,000. The unemployment rate held steady at 7.6
percent as more people entered the workforce.
The stronger-than-expected jobs growth increases the
likelihood that the U.S. Federal Reserve will begin scaling back
its $85 billion a month bond-buying programme in coming months,
Friday's sharp selloff in Treasuries - with the 10-year
yield suffering its biggest one-day rise in nearly two years -
accelerated losses that started in May over the uncertainty of
the Fed's stimulus programme.
Yields on 10-year U.S. Treasuries, which move
opposite to price, ticked up 1.3 basis points to 2.7496 percent
after they jumped 23.3 basis points on Friday, hitting their
highest since August 2011, driving up U.S. dollar borrowing
'I don't think it's negative for Japan,' said a hedge fund
manager, who declined to be identified. 'For ASEAN countries, it
is more of a concern if rates continue to go up. A lot of the
funding for some of these countries is dollar-denominated.'
Asian shares, as measured by MSCI's Asia-Pacific ex-Japan
index, eased 0.3 percent, while Tokyo's Nikkei
share average advanced 1.1 percent and Australian shares dipped 0.1 percent.
The selloff in Treasuries also weighed on Japanese
government bonds on Monday, with the 10-year yield up 2.5 basis points to 0.88 percent.
'We believe steady improvement in labour market conditions
will be enough for the Fed to start tapering its asset purchases
in September,' Barclays Capital analysts wrote in a report.
The dollar was buoyed by the upbeat data. It hit a six-week
high of 101.54 yen after gaining 1.2 percent on Friday,
its biggest one-day rise in a month.
Against a basket of major currencies, the dollar
advanced 1.5 percent to a three-year high.
The euro was steady at $1.2824 but not far off a
seven-week low of $1.2806. The common currency dropped 1.4
percent in the previous two sessions on the U.S. jobs data and
the European Central Bank's dovish policy guidance.
Brent crude prices added 0.2 percent to near $108 a
barrel, extending Friday's 2.1 percent rise on the strong U.S.
data and concerns over Egypt's unrest increasing instability in
the Middle East.
Copper prices was steady at below $6,800 a tonne
after shedding 2.3 percent in the previous session as the dollar
firmed, while gold eased 0.3 percent, extending Friday's
2 percent decline.
(Additional reporting by Ian Chua in Sydney; Editing by Eric
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