Yen, Dollar Rise Versus Euro on Concern U.S. Payrolls Declined

June 3 (Bloomberg) -- The yen and dollar advanced against the euro before a U.S. report that economists said will show payrolls fell last month, spurring demand for the relative safety of the two currencies.

The yen advanced versus all 16 of the most-traded currencies as the ADP Employer Services report may show U.S. jobs fell by 525,000 in May, after dropping 491,000 in April, according to a Bloomberg News survey. The yen also gained versus the dollar after Russian President Dmitry Medvedev said a new supranational currency could lay the foundations for a future financial system, suggesting an end to the current role of the greenback as the world’s reserve currency.

“People are cutting short positions on the yen in a hurry before major economic events in the U.S., which may drive the market’s direction,” said Shoichi Handa, senior currency dealer at SBI Liquidity Markets Co., a unit of financier SBI Holdings Inc. “If the ADP report today contains a negative surprise, the yen may be bought actively against cross currencies.” A short position is a bet an asset will decline.

The yen rose to 136.39 per euro as of 9:09 a.m. in Tokyo from 136.97 in New York yesterday. The dollar climbed to $1.4288 per euro from $1.4303, after falling to $1.4331 yesterday, the weakest level since Dec. 29. Then yen gained to 95.44 per dollar from 95.76.

The Dollar Index, used by the ICE to track the greenback against the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, rose 0.2 percent to 78.528.

The Index fell yesterday as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. Medvedev has repeatedly called for creating regional reserve currencies to address the global financial crisis.