CANADA FX DEBT-C$ weaker vs US$, surges vs yen on BoJ stimulus

* C$ at C$1.0173 vs US$, or 98.30 U.S. cents
    * Yen plunges to 4-1/2-year lows vs C$
    * C$ at weakest level vs NZD since mid-2005

    By Alastair Sharp
    TORONTO, April 8 (Reuters) - The Canadian dollar ended
slightly weaker against the greenback on Monday, still smarting
from Friday's grim employment data, but hit a
four-and-a-half-year high versus the yen following the Bank of
Japan's aggressive stimulus policy. 
    The loonie, as the currency is colloquially known, has
gained more than 6 percent against the yen since Thursday, when
the Bank of Japan unleashed the world's most intense burst of
monetary stimulus, promising to inject about $1.4 trillion into
the country's economy in less than two years, a radical gamble
that sent the Japanese currency tumbling. 
    The yen plunged to near four-year lows against the U.S.
dollar and three-year lows against the euro on Monday.
    "Most of the majors, including the Canadian dollar, are
sticking to themes developed late last week," said Greg Moore, a
foreign exchange strategist at TD Securities.
    On Friday, disappointing employment data in Canada and the
United States on Friday sent markets tumbling on concerns the
North American economic recovery may be flagging.
    The Canadian dollar ended the session trading at
C$1.0173 versus the U.S. dollar, or 98.30 U.S. cents, higher
than Friday's North American close at $1.0164, or 98.39 U.S.
    Canada's economy shed 54,500 jobs in March, more than wiping
out the previous month's big gain. Analysts had forecast an
increase of 8,500 jobs. 
    Canadian housing data on Tuesday and Thursday will be the
next potential domestic currency drivers.
    "If the job landscape doesn't look particularly good and we
see some weakness in the housing sector, than I think the market
will be more apt to sell Canadian dollar even further," said
Darcy Browne, a managing director of capital markets trading at
    The Canadian dollar was weaker against most major
currencies, with the yen a primary outlier. At one point, it
touched its weakest level against the New Zealand dollar
 since mid-2005, but gained versus the British pound
and Swiss franc. 
    "When you look at the movement of the Canadian dollar,
Friday obviously, all the short-term guys bought dollars after
the weak Canadian data. They were all squeezed out late in the
day...the flight of the yen capital is finding its way to Canada
as well," Browne said.
    "There's a slight dislocation in the currency markets
created by the yen crosses right now. Look for that to correct
and we'll probably see a higher dollar overall versus Canada in
the near term."
    TD's Moore said the loonie would likely not move drastically
until at least Wednesday, when the U.S. Federal Reserve releases
minutes from its last policy meeting that could provide hints to
its changing view of monetary easing.
    "If there was any talk of QE ending, that could bolster the
hawkish view, that would be U.S. dollar positive, risk asset
negative," Moore said.
    He expects the Canadian currency to struggle to push past
C$1.01 and said it would also face resistance getting much above
the low C$1.02s this week.
    The price of Canadian government debt was lower across the
curve, with the two-year bond down 2.5 Canadian cents
to yield 0.992 percent and the benchmark 10-year bond
 slipped 14 Canadian cents to yield 1.767 percent.