TOKYO, April 10 Reuters The yen sank against major peers on Monday after U.S. payrolls data bolstered the case for further Federal Reserve rate hikes, highlighting a growing disparity with Japan where the central bank continues to pin the benchmark yield near zero.

Meanwhile, the risksensitive New Zealand and Australian dollars weakened amid heightened U.S.China tensions over Taiwan, with Beijing a key trading partner for the Antipodean nations.

The yen slipped 0.4 against the U.S. dollar to 132.70, extending its decline from Friday, when data showed the U.S. economy continued to add jobs at a brisk pace in March.

Tenyear Treasury yields reached 3.413 in shortened trading on Friday for the Easter holiday. The yield remained elevated at 3.3719 in Tokyo on Monday, when many markets in Asia as well as Europe will remain closed.

Against the euro , the yen slumped over 0.5 to 144.635. It fell roughly 0.3 versus sterling .

The dollar strengthened against the yen because of the continued strong growth in the U.S. labour market despite inflation and sharp interest rate rises, Mizuho analysts Masafumi Yamamoto and Masayoshi Mihara wrote in a client note.

Yields in places like the euro area, Britain and Australia will follow U.S. yields higher, so there won39;t be a big widening of the yield gap, they said. Relative to them, yield spreads will see a much bigger impact in Japan.

However, the increase in jobs was less than the prior month and the rise in average hourly wages…