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The government is expected to report on Friday that private employers added 75,000 jobs in September after an increase of 67,000 in August, according to a Reuters survey. The report is due at 8:30 a.m. EDT.

There is a risk, however, that overall nonfarm payrolls fell for a fourth straight month after an independent survey this week showed a contraction in private jobs in September.

Government employment is expected to be depressed by the termination of more temporary jobs for the decennial census and layoffs at cash-strapped local and state governments.

In the wake of dovish speeches by senior Fed officials, including Chairman Ben Bernanke, analysts said it was now almost certain that the U.S. central bank would launch a second round of asset purchases -- with many expecting a move in November -- even if the jobs report surprised on the upside.

"They may delay it till December, but the odds favor we get something. It might not be as much as the market wants, because the economy might be doing better," said Michael Strauss chief economist at Commonfund in Wilton, Connecticut.

Expectations that the Fed, which has already pumped $1.7 trillion into the economy by buying mortgage-related and government bonds, would announce a second phase of quantitative easing at its November 2-3 meeting have buoyed U.S. stocks and prices for shorter-dated government debt and have undercut the dollar.

The employment report will be the last before the November 2 mid-term elections in which President Barack Obama's Democratic Party is expected to suffer large losses amid voter dissatisfaction with the state of the economy.

Opinion polls suggest Republicans will take control of the U.S. House of Representatives, which may give them a platform to pursue their agenda of restricting government spending to reduce a record budget deficit.

SIGNS OF IMPROVEMENT

The recovery from the longest and deepest downturn since the 1930s has been too slow to generate jobs, but the labor market is beginning to show some improvement.

First-time applications for unemployment benefits have dropped from a nine-month high touched in mid-August and some surveys have suggested a pick-up in demand for labor.

In addition, the government last month revised payrolls data for June and July to show fewer job losses, and analysts will be watching to seen if the trend continued in August.

"More jobs than people realize are being created," said Brett D'Arcy chief investment officer at CBIZ Wealth Management in San Diego, California.

"This recovery, although a longer recovery, is following the traditional steps of how a recovery happens. We are at the point where we should and probably will see some fairly strong job creation."

The UAE had said it would suspend BlackBerry Messenger, email and web browser services to about 500,000 subscribers from October 11 unless Canadian BlackBerry maker RIM works out a way to locate encrypted servers in the country, so that the government can seek access to messages.

"The Telecommunications Regulatory Authority (TRA) has confirmed that Blackberry services are now compliant with the UAE's telecommunications regulatory framework," a statement on WAM said.

"Therefore all Blackberry services in the UAE will continue to operate as normal and no suspension of service will occur on October 11, 2010," it said.

Saudi Arabia and India also threatened to cut off services but have reached an agreement with RIM, and an UAE official said in September the country was "very optimistic" about reaching a deal before the October 11 deadline.

Before the dispute, Information sent to and from BlackBerries had been encrypted and handled by servers outside the UAE.

The UAE had voiced concerns over its inability to access the information through legal means, citing security and sovereignty issues, and had emphasized it was not able to reach a deal since new telecoms regulations took effect three years ago.

WAM gave no details on the agreement reached.

"The TRA also acknowledged 'the positive engagement and collaboration of Research In Motion (RIM) in reaching this regulatory compliant outcome'," it said.

(Reporting by Andrew Hammond and Raissa Kasolowsky, Writing by Andrew Hammond)

Prime Minister Naoto Kan said Tokyo wanted to cooperate with its Group of Seven peers on currencies, but in the same breath reiterated the message that the authorities would take "decisive steps" if needed.

Global policymakers have been clashing over the dollar's broad-based decline, with emerging economies stepping up efforts to cap rises in their currencies, which developed nations argue could derail the economic recovery.

Some warn that trade protectionism could soon follow if tensions are not eased.

China, which has rebuffed calls from the West to let its currency rise faster, allowed the yuan to firm on Friday to its highest against the dollar since a revaluation in July 2005.

Traders said Beijing may be making some concessions to external pressure but any further rise will be limited so as not to harm its exports.

The Japanese authorities, who are also worried a strong yen would hit its vital export sector, intervened in the market for the first time in six year last month, drawing criticism from its peers.

Finance Minister Yoshihiko Noda noted that competitive currency devaluations were bad for the global economy, but defended Japan's action saying it was aimed at stopping excessive moves and not a signal it will guide the yen to a specific level.

"We are approaching a G7 meeting, but regardless of this, Japan will take firm measures, including intervention, when needed," Noda told reporters when asked about the yen's rise to another 15-year high on Thursday. "This is Japan's basic stance."

The International Monetary Fund will kick off its twice-yearly meeting with the World Bank in Washington later on Friday. G7 finance ministers will hold a closed-door dinner also later in the day while a breakfast of broader G20 finance chiefs is also scheduled.

"CURRENCY WARS"

Officials from developing markets say ultra-low interest rates in rich countries are fuelling massive fund flows into their markets, pushing up their currencies and inflating prices of stocks, property and other assets.

To limit the rise in their currencies, nations from South Korea to Brazil have moved to restrain capital flows or relied on market intervention, fanning fears that such isolated actions could escalate into devastating "currency wars."

In addition to calls from the United States on China for a stronger yuan, European Commission officials said on Thursday that the European Union would keep pressing China to revalue the yuan.

Beijing, however, argues that a steep rise in its currency was neither in China's or the world's interest.

The Federal Deposit Insurance Corp (FDIC), as part of a proposed rule, was expected to say all creditors of large, non-bank financial firms should expect losses in a failure, the WSJ said.

The rules, which could be unveiled as early as Friday, will be part of a broader effort to end the era of "too big to fail" financial institutions, the WSJ said.

The FDIC, which is in the process of voting on the proposed rule, was expected to say that in some instances, certain short-term creditors could expect to get additional payments, the newspaper said.

The FDIC could not be reached for comment.

(Reporting by Sakthi Prasad in Bangalore; Editing by Dan Lalor)