LONDON (AFX) - The dollar pared some of its overnight gains in early London trade on a bout of short-covering but attention remain focus on US data with sentiment favouring a positive result for the unit, dealers said. An announcement by rating agency Standard & Poors that it is not planning to downgrade Japan's international credit rating "at the moment", together with Finance Minister Masajuro Shiokawa voicing concerns about the yen's rapid slide, assisted the yen to a stronger close, they added. Paul Bednarczyk, analyst at London-based economic consultancy 4CAST, noted some exporters' interest to sell dollars from Tokyo in early trade. "There is still lots of talks of repatriation for year-end, and even though it is a little early for that, it is going to weigh on the dollar/yen until the end of March," he predicted. "But the strong dollar victory is still pretty much intact," he added. This was echoed by Audrey Childe-Freeman, economist at CIBC World Markets. Citing overnight comments by US Secretary Treasury Paul O'Neill reiterating its strong dollar policy, she said: "There was a combination of things favouring and reinforcing the negative sentiment that was already in place, and we're seeing further weakening of the yen." She expects today's US non-farm payroll number and the ISM index to be dollar-supportive and to confirm that the US manufacturing sector has reached the bottom and that the pace of increase in unemployment is easing. The possibility of a positive nonfarm payroll number(consensus of -50K) and a rise in the ISM index (former NAPM) above 50 should support the market view that the US growth risks are to the upside, noted WesLB analysts. "While we remain more cautious on the speed of the economy...only a change in the overall recovery scenario would derail the positive US sentiment," they wrote in a note to client. The euro remained under pressure against most currencies despite a positive reading on the European manufacturing PMI this morning. The Euro Zone manufacturing sector purchasing managers' index rose to a seasonally adjusted 46.2 in January from 44.1 in December. A reading above 50 indicates that the manufacturing sector is generally expanding, while a reading below 50 suggests that it is generally contracting. Analysts noted that the average monthly euro/dollar performance in February had been negative for the first time since 1996, thereby making a further downward move on the pair more likely. Meanwhile, sterling broke through the 1.41 usd level, a level last broken in 1986. Bednarczyk noted buying interest from a European bank to buy some euro/sterling.