* U.S. Congress passes bill to temporarily avert govt shutdown
* Bitcoin tops $16,000 as investors fret about pace of gains
TOKYO, Dec 8 (Reuters) - The dollar inched higher on Friday, on track for a weekly gain against a basket of currencies, as the passage of a bill to temporarily extend U.S. government funding raised investors' optimism that a tax reform bill would also pass.
Later on Friday, the closely watched U.S. non-farm payrolls report is expected to show 200,000 new jobs were created in November, according to a Reuters poll.
The dollar index, which gauges the greenback against a basket of six major rivals, was steady on the day at 93.801 , up 1 percent for the week.
Removing one major stumbling block for the dollar on Friday, the U.S. Congress on Thursday passed legislation to temporarily fund the government through Dec. 22, beating a Friday midnight deadline. The bill will be sent to President Donald Trump to sign.
U.S. Senate Republicans agreed to talks with the House of Representatives on sweeping tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed Dec. 22 deadline.
"The market action this week has mostly been drawing cues from Washington," said Bill Northey, chief investment officer at the private client group of U.S. Bank in Helena, Montana.
"But from an economic perspective, as we start to look at the real economy, we will get one of the first 'clean reads' on employment," he said, referring to a jobs report in which the impact of the year's hurricanes is no longer a factor.
The number of Americans filing for unemployment benefits unexpectedly fell last week to 236,000, data showed on Thursday.
Fed funds futures prices show that investors expect the U.S. central bank to hike rates at its Dec. 12-13 meeting, with investors now focused on how many more hikes to expect in 2018.
Against its Japanese counterpart, the dollar was 0.1 percent higher at 113.16 yen, trading at its highest levels since mid-November and up 0.8 percent for the week.
The euro was steady from late U.S. levels at $1.1774, trading around its lowest levels since Nov. 22 and down 1.1 percent for the week.
Bitcoin continued to rise on the Bitstamp exchange, notching a record high of $16,615.62 and up more than 50 percent for the week, as investors debated about whether the cryptocurrency was in a bubble that was about to burst.
(Reporting by Lisa Twaronite; Editing by Eric Meijer)