The dollar jumped against the yen but immediately surrendered those gains on Friday after a report showed a larger-than-expected drop in U.S. June nonfarm payrolls to 125,000, while the unemployment rate unexpectedly fell to 9.5 percent.

The euro gained against the dollar as investors looked past economic problems in the euro zone and instead focused on the possibility of a stalled economic recovery in the U.S.

The dollar was last at 87.35 yen on electronic trading platform EBS JPY=EBS, compared with 87.60 yen prior to the data.

The euro last traded at $1.2592 EUR=EBS EBS, up from the $1.2550 it traded at before the report.

Analysts were forecasting the loss of 110,000 jobs in June and the unemployment rate to post at 9.8 percent, according to a Reuters poll. (Reporting by Nick Olivari, Editing by Chizu Nomiyama)

Unemployment U.S. Jobs