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Yen Stutters, Dollar Focus on U.S. Jobs


The yen fell on Friday, following a slide in Tokyo shares, while the dollar traded in tight ranges elsewhere ahead of a U.S. labor market report expected to provide clues about the U.S. interest rate outlook...

INFLATION PRESSURES

In the euro zone, European Central Bank chief economist Otmar Issing said he was very concerned about an increase in inflation expectations.

Underlying price pressures in the euro zone reached their strongest level in four years in May, an index compiled by the Economic Cycle Research Institute showed on Friday.

The ECRI index rose to 94.7 percent in May from a downwardly revised 94.4 in April.

International Monetary Fund Director Rodrigo Rato said central banks must remain vigilant on inflation, but inflationary pressures were not yet strong in Europe or the U.S.

Euro zone producer prices rose 2.4 percent on an annual basis in May, the fastest pace since February 2003 and above expectations.

The EU Commission said euro zone growth was likely to exceed the official forecast of 1.7 percent in 2004, and a further rise in the euro could not be ruled out given U.S. imbalances.

President Bush makes a speech on the U.S. economy at 1455 GMT in Washington.

U.S. bond markets shut early on Friday ahead of the U.S. Independence Day holiday on Monday, and analysts say worries about attacks on U.S. soil over the holiday weekend could depress the dollar.