Nikkei up on bold BOJ; US jobs weigh

By Chikako Mogi

TOKYO (Reuters) - The yen tumbled broadly and Japanese stocks soared on Monday, reflecting high expectations for the Bank of Japan's ambitious stimulus drive, but U.S. weak jobs data weighed on other assets.

The dollar jumped a full yen in early Asian trading to hit 98.78 yen, the highest since June 2009, while the euro climbed as far as 128.42 yen, its highest since January 2010. The Aussie dollar soared to 102.32 yen, the highest since July 2008.

Dealers cited a report in the Japanese Nikkei business daily saying the BOJ would this week buy 1.2 trillion yen of government bonds with a maturity of over five years, showing a sense of urgency to beat the country's deep-rooted deflation.

BOJ governor Haruhiko Kuroda surprised global markets last week when in his inaugural policy meeting the bank said it would radically overhaul its monetary policy and inject about $1.4 trillion into the economy in less than two years by buying government bonds across the maturity spectrum.

The dollar's reversal from Friday's declines followed a weaker-than-expected U.S. nonfarm payrolls report. The data added to fears the U.S. economic recovery may be losing steam, but the recovery showed market players' faith in the dollar's strength against the yen.

"The weak yen trend driven by expectations for aggressive BOJ easing remains firmly in place, and there now seems to be a strong conviction by market players that the yen will continue to weaken, with the 100 yen seen only as a transitional point," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.

"Aside from something psychological, there isn't any reason to stop the dollar at 100 yen. The way the yen is sold despite the weak U.S. jobs data, there is really no reason to buy the yen right now," he said.

The dollar last hit 100 yen in April 2009.

Maeba said he personally felt the pace of the latest yen selling was rapid, but said the dollar may touch 100 yen as early as this week and could easily aim for 102-103 yen this month.

The U.S. Labor Department said the U.S. economy produced just 88,000 new jobs last month - less than half the 200,000 expected in a Reuters poll, and below even the lowest estimate in the survey.

The MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.1 percent.

Australian shares were up 0.1 percent while South Korean shares eased 0.3 percent on rising tensions in the Korean peninsula.

"Despite being at multi-month lows, the index is likely to trade within a tight range as foreign selling will continue on the uncertainty from North Korea," said Lee Eun-taek, an analyst at Dongbu Securities.

South Korea and the United States believe that North Korea could conduct a missile launch by Wednesday, after which the North said it could not guarantee the safety of resident diplomats.

Japan's Nikkei stock average jumped 2.8 percent after soaring more than 4 percent to above the 13,000 level on Friday for the first time since August 2008.

Major stock markets tumbled and the dollar fell on Friday on the U.S. jobs report, driving a flight to safety that boosted prices of U.S. Treasury securities and gold.

Brent crude oil fell to an eight-month low on Friday as the bleak U.S. jobs data dimmed the outlook for fuel demand in the world's largest oil consumer.

U.S. crude futures were steady around $92.73 a barrel early on Monday.

(Additional reporting by Wayne Cole in Sydney and Somang Yang in Seoul; Editing by Eric Meijer)