* Euro/dollar on track for weakest day in three weeks
* Yen suffers after Japan finance minister's comments
* Friday's data likely shows no job losses in December (Adds comment, updates prices)
By Wanfeng Zhou
NEW YORK, Jan 7 (Reuters) - The U.S. dollar rose broadly on Thursday a day before a key U.S. government jobs report expected to show two years of job losses ended last month.
The euro declined after weaker-than-expected euro-zone economic data, while the yen hit a four-month low versus the greenback after Japan's new finance minister said he wanted the yen to weaken more.
The U.S. Labor Department will release its December nonfarm payrolls data on Friday. Economists polled by Reuters expect the report to show no jobs were lost -- the best result since the economy tumbled into recession two years ago. [ECI/US]
"There're some positive expectations for tomorrow's nonfarm (payrolls) number and that might be helping give the dollar a bit of a bid," said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto. "We're still in that mode where good news on employment is good news for the U.S. dollar in the short term."
In late trading, the euro <EUR=> fell 0.6 percent to $1.4322, on track for its weakest day since Dec. 17, according to Reuters data. It fell to a session low of $1.4299, hurt by weak German manufacturing orders and euro-zone retail sales data. See [ID:nLDE6060OX].
The dollar was up 1 percent at 93.23 yen <JPY=> after climbing to 93.40, its strongest since early September, according to Reuters data.
Speaking after his appointment as finance minister, Naoto Kan said many Japanese firms were in favor of dollar/yen around 95 yen, higher than the pair traded in late 2009. [ID:nTOE60607E]
"Japan's clearer stance on FX further raises the possibility of intervention if the yen strengthens again and thus discourages yen bulls," currency strategists at Barclays Capital wrote in a research note.
The firm expects the dollar to rise to 95 yen in the mid-year and hit 100 yen by year-end.
Against a basket of six major currencies, the dollar index <.DXY> gained 0.6 percent to 77.975.
Earlier a stronger-than-expected weekly U.S. initial jobless claims report supported the dollar and added to the view that the economy continues to improve after being mired in a deep recession. [ID:nN06156563]
"The larger-than-expected drop in both the headline and four-week moving average and even continued claims should be consistent with continued recovery in labor markets," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.
The dollar's gain came a day after minutes from the Federal Reserve's latest policy meeting suggested more economic stimulus measures were possible should the economy weaken and unemployment stay high.
Some analysts said the U.S. central bank's December meeting was held after the release of surprisingly strong November jobs data and the minutes suggested Fed officials may have a darker view of the economy than recent data suggests. They added that the Fed will likely keep interest rates at very low levels for some time even if Friday's report shows job growth. (Additional reporting by Gertrude Chavez-Dreyfuss and Nick Olivari; Editing by James Dalgleish)