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* Key U.S. jobs report due at 1230 GMT
* Strong reading could prompt early end to stimulus
* Global asset performance http://tmsnrt.rs/2yaDPgn
* World FX rates http://tmsnrt.rs/2egbfVh
By Kevin Buckland and Lawrence White
TOKYO/LONDON, June 4 (Reuters) - The dollar hit a multi-week
high on Friday while European stocks, oil and gold steadied as
markets held their breath for a U.S. jobs report seen as a
critical signal for economic recovery and a possible easing of
stimulus measures.
U.S. Treasury yields firmed after jumping overnight, while
the dollar held onto its biggest gain since April with other
currencies subdued ahead of the crucial U.S. nonfarm payrolls
data release.
The pan-European STOXX 600 index was up 0.1% by
1137 GMT, trading just below its record high touched earlier
this week, and contrasting with an earlier 0.3% fall in MSCI's
broadest index of Asia-Pacific shares outside Japan
.
The U.S. Labor Department's report at 8:30 a.m. ET (1230
GMT) was expected to show 650,000 new jobs added to nonfarm
payrolls in May, after an unexpected slowdown in the labor
market in April.
A stronger-than-expected reading could heighten worries that
the robust economic recovery could push the Fed to contemplate
paring back its bond buying and raising interest rates.
Stock markets were listless ahead of the jobs data release,
with Japan's Nikkei earlier falling 0.4% while the
broader Topix was about flat.
Airlines suffered, with British Airways-owner IAG,
Wizz Air and easyJet slipping between 1%-2%
after Britain added seven countries, including Egypt and Sri
Lanka, to its "red list" of destinations that require hotel
quarantine on return to England.
U.S. stock futures, the S&P 500 e-minis, rose
slightly, following a 0.4% loss for the index overnight.
The 10-year Treasury yield held at 1.6284%,
after advancing nearly four full basis points overnight.
The dollar index held Thursday's 0.7% rally, its
biggest since April, to hover around 90.55.
TAPER TALK
While Fed officials have consistently said they expect
current inflationary pressures to be transitory and for
ultra-easy monetary policy to stay in place for some time, they
are also increasingly touting the need to at least start talking
about a tapering of stimulus.
Investors have been carefully parsing the economic data to
gauge if inflation could prove sticky enough to force the Fed's
hand on tapering.
Last month, much-lower-than-expected nonfarm payrolls
numbers knocked back those expectations, weakening Treasury
yields and the dollar.
"Clearly, traders are covering USD shorts into the jobs
data," Chris Weston, head of research at brokerage Pepperstone
in Melbourne, wrote in a note to clients. "I am not even going
to try and predict this one, it is a lottery, although the
so-called 'whisper number' is closer to 790,000."
Copper prices rebounded as investors scooped up material at
lower prices. Three-month copper on the London Metal Exchange
gained 0.8% to $9,870 a tonne, having tumbled as much as
3.8% in the previous session.
Gold stabilised after a 2% tumble on Thursday, its
biggest since February, to trade flat around $1,870 per ounce by
1137 GMT.
Oil rose towards $72 a barrel, trading close to a two-year
high as OPEC+ supply discipline and recovering demand countered
concerns about patchy COVID-19 vaccination rollouts around the
globe.
Brent futures rose 11 cents to $71.42 a barrel,
after reaching the highest since May 2019 in Thursday's session.
U.S. WTI added 17 cents to $68.97 a barrel, just below
$69.40 a day earlier, the strongest since October 2018.
(Editing by Kim Coghill and Mark Heinrich)
