* Dollar/yen rebounds on bargain hunting before U.S. jobs data
* BOJ Kuroda: weak yen positive for economy as a whole
* Further upside for dollar seen if jobs data proves firm (Recasts, adds details)
By Anirban Nag
LONDON, Oct 3 (Reuters) - The dollar rebounded against the yen on Friday, lifted by bargain hunting before U.S. jobs data and comments from the Bank of Japan chief that a weak yen was positive for the economy.
The dollar index rose, moving in sync with U.S. Treasury yields, which have edged up in anticipation of a good jobs number. The index was on track for a 12th straight week of gains, a feat not seen in four decades, and highlighted how bullish investors were about the dollar's prospects.
The September nonfarm payrolls data is due at 1230 GMT and a robust number could further fuel expectations of an early interest rate hike by the Federal Reserve. According to a Reuters poll of economists, nonfarm payrolls are seen coming in at 215,000, a big jump from August.
The dollar index was up 0.25 percent at 85.793, not far from a four-year high of 86.218.
"The dollar index is headed for 12 straight weeks of gains which is unprecedented. It has to overcome the non-farm payrolls data to close higher, but generally speaking the building blocks for a further dollar rally are in place," said Jeremy Stretch, head of currency strategy at CIBC World Markets.
While CIBC's forecasts for jobs growth in September are below consensus, Stretch expects an upward revision to August numbers which would still leave the U.S. labour market adding jobs at a fairly brisk pace. A robust jobs number would bolster expectations that monetary policies between the U.S. and its counterparts in Japan and Europe are set to diverge.
Both the Bank of Japan and the European Central Bank are pursuing ultra-loose monetary policy to stave off deflation and encourage growth, while the Fed's asset purchase programme is set to end this month.
The dollar rose 0.3 percent to 108.75 yen, coming off the week's trough of 108.01 hit on Thursday, but was still some distance from the six-year peak of 110.09 struck on Wednesday.
Bank of Japan Governor Haruhiko Kuroda said the yen's weakening is positive as long as it reflects the actual state of the economy.
"The fact that dollar/yen managed to hold just above 108 encouraged dollar bulls. Whether the dollar is really on an uptrend is still unclear, so buying on dips is a sound strategy for now," said Bart Wakabayashi, head of forex at State Street in Tokyo.
EURO BEARS DISAPPOINTED
The dollar's upswing saw the euro shed 0.2 percent to trade at $1.2645.