GLOBAL MARKETS-Yen sags on Tokyo Olympics win, China data seen lifting Asia shares
* Yen drops as Tokyo's Olympic victory seen boosting Nikkei
Stronger-than-expected China data seen supporting Asian shares
* Markets seen on edge until Fed policy meeting on Sept 17-18
* Oil prices near two-year high amid concerns over U.S. military action
By Hideyuki Sano
TOKYO, Sept 9 (Reuters) - The yen dropped on Monday as traders positioned for a rally in Japanese shares after Tokyo won its bid to host the 2020 Summer Olympics, while Asian shares look set to gain after mildly upbeat Chinese trade data underscored signs of stability in the world's second-biggest economy.
The dollar was steady after plunging against a basket of currencies on Friday following a disappointing jobs report.
The payrolls data saw the dollar index drop to 82.256 from a 7-week high of 82.671 hit on Thursday as some traders pared back expectations that the Federal Reserve might start winding back its stimulus later this month.
The dollar index was at 82.302 in early Asia trade, mainly as the U.S. currency rose 0.7 percent to 99.85 yen, in anticipation of gains in Japanese shares after Tokyo's Olympics win. The dollar/yen has had a high correlation to Japanese equities in recent months.
"In the short-term, this (Olympics-bid win) will be positive mainly through a boost on Olympic-related shares," said Ryota Sakagami, chief equity strategist at SMBC Nikko Securities in a report.
"In the longer run, its impact depends on how much the government can push for infrastructure investments and promotion of tourism business but it is likely to be positive on the Japanese economy and shares," he said.
Improved Chinese trade figures released over the weekend might help Asian stocks push higher during the session.
Data showed China's exports grew 7.2 percent in August, above market expectations of a 6.0 percent rise from a year earlier, adding to evidence that the world's second-largest economy may have avoided a sharp slowdown.
However, import figures came in slightly weaker than expected and investors will be bracing for more data from China this week, including inflation on Monday and industrial production and retail sales on Tuesday.
Investors are also grappling with the anxiety that withdrawal of the Fed's stimulus could destabilise asset prices worldwide.
"Although the U.S. job data was disappointing on the whole, the jobless rate fell, inching closer to the 7.0 percent level, which the Fed said is a threshold to end the quantitative easing," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.
"The Fed will start tapering in September, perhaps little by little, like by $10 billion. It is hard to expect bond yields to fall before the next Fed meeting," he added.
The U.S. Treasury note futures opened at 122-31.5/32, flat from late U.S. levels and off two-year low of 122-7/32 hit on Friday. Cash bond trading will start at 0000 GMT.
The Australian dollar was up slightly on the Chinese trade data, fetching $0.9197, after hitting a three-week high of $0.9222 at one point.
There was hardly much reaction to the widely expected outcome of Australia's national election, which saw the nation's conservative Liberal-National Party coalition sweep into power over the weekend.
Elsewhere, U.S. crude oil futures stayed near two-year highs supported by concerns a possible military strike against Syria could stir broader conflict in the Middle East and cause disruption in oil supplies.