The dollar edged lower on Monday but stayed within sight of a seven-week high against the yen after an upbeat U.S. jobs report and a fall in the unemployment rate last week reinforced expectations for higher U.S. interest rates. Traders said Japanese exporters took advantage of the dollar's rise on Friday to pick up yen, helping pare back the U.S. currency's gains. The dollar was also weaker against the euro after hitting a one-month peak against the single currency on Friday. The U.S. currency had gained after U.S. jobs growth figures were revised higher for the last five months of 2005, keeping the market optimistic about economic recovery despite data showing that fewer new jobs were created than expected in January. Other data showed that the U.S. jobless rate fell to a 4-1/2-year low of 4.7 percent. The data pushed the U.S. currency up to key levels, but Japanese exporters are keen to buy yen around 118 yen and institutional investors are showing buying demand for euros around $1.1950. Traders said that the market was waiting to see whether expectations for additional U.S. rate rises would sweeten dollar sentiment enough to help the currency make a sustained break beyond these levels. "In terms of the bigger picture and the effects of Friday's events, on the balance, things are very dollar-positive, but we've hit levels that are hard to break," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo. "The market wants to see whether it can break the downside range in euro/dollar and break higher in dollar/yen." As of 5:52 a.m. British time, the dollar was at 118.50 yen down 0.3 percent from its level in late New York trade on Friday, when the U.S. currency rose as high as 119.40 yen on electronic trading platform EBS. The euro was trading at $1.2028 , barely changed from late New York levels and above Friday's low of $1.1968 on EBS. Sterling was down around 0.1 percent at $1.7605 , regaining its balance after tumbling more than 1 percent on Friday. Traders said the UK unit could come under selling pressure ahead of a Bank of England policy-setting meeting on Thursday. The BOE is seen keeping rates on hold for the sixth straight month this week, but many analysts say that slow economic growth will prompt the central bank to cut rates later in the year. The dollar eased a touch against the Swiss franc to 1.2939 per dollar as the Swiss currency kept its recent upward momentum on buying by investors on a safety bet amid growing concerns about Iran's nuclear ambitions. Iran on Sunday ended snap U.S. inspections of its nuclear sites and said it was resuming uranium enrichment procedures after it was reported to the U.N. Security Council over suspicions that it is building nuclear weapons.