SINGAPORE, July 10 Reuters The dollar clawed back its losses on Monday, recovering from a kneejerk reaction to data showing U.S. job gains were the smallest in twoandahalf years, while disappointing inflation figures in China weighed on the yuan and proxies.

Nonfarm payrolls increased 209,000 in June, figures released on Friday showed, missing market expectations for the first time in 15 months.

However, details in the employment report reflected persistently strong wage growth, pointing to stilltight labour market conditions.

The U.S. dollar marched higher in Asia trade after tumbling nearly 1 against a basket of currencies on Friday in response to the data, and rose particularly against the Japanese yen.

The greenback was last 0.53 higher at 142.98 yen , having slid nearly 1.3 against the Japanese currency on Friday as U.S. Treasury yields eased.

The dollaryen pair is particularly sensitive to U.S. yields as interest rates in Japan are anchored near zero.

It39;s a bit of an unwind from the overreaction that we saw on Friday. There was an overreaction to the nonfarm payrolls report, so it doesn39;t surprise me that the yen39;s weakening today, said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia.

Sterling was last 0.25 at 1.2809, after having surged to a more than oneyear peak of 1.2850 on Friday, while the euro slid 0.14 to 1.0953.

I certainly don39;t trust that U.S. dollar move…whether it39;s sustained,…