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Dollar moderately firmer

against key units

NEW YORK: The dollar closed moderately firmer versus most major currencies, but traders and analysts played down the gains because volume was paper thin.

Uncertainty about key U.S. jobs data for March due out Friday at 0830 EST/1330 GMT kept some investors sidelined.

"The fact that we have a payrolls number on Friday which is typically unpredictable means people aren't willing to put on big positions ahead of that," said John Rothfield, an international economist at NationsBanc-CRT.

News of a huge 705,000 rise in U.S. non-farm payrolls in February had surprised the foreign exchange market last month.

March non-farm payrolls are expected to show a 60,000 gain, while the March jobless rate is seen inching up 0.1 to 5.6 percent, based on the average forecast from a Reuter poll of economists. Friday's report will also be scrutinized for any revision to the hefty increase in February payrolls.

The dollar ended at 107.57/64 yen, up from 107.20/30 at the open. It closed at 1.4831/36 marks, up from 1.4806/11.

Dollar/yen had briefly hit 107.62, the intraday high, during late New York trading.

"I wouldn't get to excited about it," said Charles Spence, director of Treasury sales at Standard Chartered.

"I wouldn't get to excited about it," said Charles Spence, director of Treasury sales at Standard Chartered.

Japan's Ministry of Finance reported last Friday that Taiheiyo Bank would be liquidated. The Long-term Credit Bank of Japan also said on Monday U.S. authorities were probing its New York-based unit because of improper bond trades.

While the upcoming jobs report virtually held the foreign exchange market spellbound, there are factors in place that suggests the dollar will likely continue its recent rally against the yen, some traders and analysts said.

"There is some anticipation (the dollar) is going to head higher almost regardless of what happens with payrolls," said MCM CurrencyWatch international economist Kevin Harris.

"The new year leads to anticipation that there'll be an outflow of savings from Japan into other markets...," said Harris, referring to start of the Japanese fiscal year that got underway this week.

At the same time, Harris pointed out some developments that might cloud the dollar's outlook relative to the yen.

For example, some Japanese market rates have been creeping higher.

Harris noted there is concern the Bank of Japan is allowing short-term market rates to rise.

"They don't have to ease," he said. "They can simply provide lots of liquidity in the overnight market and bring short-term rates down."

"People are watching them fairly closely to see if they do that," he added.

Elsewhere, the dollar ended at 1.1950/60 Swiss francs, up from 1.1925/28 at the open. It rose slightly to Canadian $1.3548/53 from C$1.3542/47.

Sterling fell to $1.5240/45 from 1.5250/60 at the open. The Australian dollar ended at $0.7825/30.-Reuter