FOREX-US dollar rises against yen as markets eye Iran deal, jobs report

Investors are turning their attention to the release on Friday of the U.S. employment report USNFAR=ECI for July, which could provide more clues on the Federal Reserve's interest rate path. Data showed the country's services sector stayed strong in July while services-sector employment slowed.

A divided U.S. central bank left rates unchanged last month but Fed Chairman Kevin Warsh delivered an unwavering commitment to bring inflation down, leaving the door open to a possible rate hike in September.

"Any data release after the Fed meeting in July is just very important," said Francesco Pesole, an FX strategist at ING. "Tomorrow's payrolls could be pretty big for dollar-yen. If it's a hot print then you would probably start to see a new build up of speculative longs on dollar-yen."

U.S. nonfarm payrolls are expected to have risen by 80,000 last month after an increase of 57,000 in June, according to a Reuters survey of economists. The unemployment rate USUNR=ECI is forecast to hold steady at 4.2%.