* Strong jobs growth sends dollar up vs yen
* U.S. stocks set to open sharply higher
* Euro trims gains vs greenback to $1.3059
By Richard Hubbard
LONDON, May 3 (Reuters) - The dollar rose over 1 percent against the yen and U.S. stock index futures pointed to a sharp rise on Wall Street on Friday after data showed the American economy was adding jobs at a faster rate than expected.
The April nonfarm payrolls report showed employers had hired 165,000 more people, up from a revised 138,000 in March and compared with expectations for only an additional 145,000 new jobs last month.
U.S. stock index futures jumped after the numbers came out, indicating that the widely watched S&P 500 index was likely to break the key 1,600 point level.
"The idea that the employment is holding as well as it is in the face of the fiscal headwinds the economy is currently enduring is a very positive sign of the economy's underlying fundamental improvements," said Russell Price, a senior economist at Ameriprise Financial Services.
The dollar rose as high as 99.18 yen, compared with 97.95 yen before the data. It was last at 99.14 yen, up 1.3 percent on the day.
The euro was 0.1 percent lower on the day at $1.3059, compared with $1.3118 before the release of the data.
The jobs figures cap a big week for financial markets that has seen the U.S. Federal Reserve recommit to its aggressive monetary policy easing and the ECB cut rates to record lows and signal further policy easing may lie ahead.
The moves come just a month after the Bank of Japan promised to inject about $1.4 trillion into its economy to spur growth and end decades of deflation.
By increasing liquidity, three of the world's major central banks have fuelled a rally in share and bond markets that has driven many benchmark indexes back up to levels last seen before the financial crisis began.
Europe's broad FTSEurofirst 300 index of leading shares rose 0.5 percent after the jobs data to highs last seen in mid-2008. The index has gained 5.1 percent since the middle of April, despite a disappointing earnings season.