TOKYO (Reuters) - The dollar cracked the 100 yen level again on Wednesday, led by a slide in the Nikkei as Japanese Prime Minister Shinzo Abe's announcement of his new growth policies fell short of market expectations. The dollar dropped 0.5 percent to 99.49 yen after spiking as high as 100.47, as algorithmic trading jolted the Japanese stock market, according to traders. The Nikkei reversed earlier gains to close down 3.8 percent. "It was an algo movement. The forex market is tightly correlated with the stock market at the moment, which is very choppy. It also seems that some people had high expectations for Abe's speech, but all positive factors were eventually exhausted, "said Yoh Nihei, senior FX market analyst at Citi. As reported in the Japanese media before his speech, Abe said he aims in the next decade to increase gross national income by 3 percent and to double foreign direct investment to $300 billion, partly through the creation of special economic zones designed to attract overseas technology and human resources. Renewed strength in the yen paused the dollar's gradual recovery from an early week sell-off against a basket of currencies, with investors holding their breath for a trio of U.S. job reports due on Friday. The dollar index inched down 0.1 percent to 82.885 , though it was some way above a one-month low of 82.428 plumbed on Monday in the wake of disappointing manufacturing data that argued against an early start for the Federal Reserve to unwind its stimulus program. That put Friday's non-farm payrolls (NFP 0.00%, news) in the spotlight for dollar bulls. A report by payrolls processor, ADP, due later on Wednesday, will be closely watched for clues on the NFP report. Even the weekly jobless claims series has gained far more attention as investors try and second guess the Fed. "Our U.S. economists expect an above-consensus 200,000 print in the ADP May employment release, which should signal private sector job expansion stronger than the overall pace of hiring in the economy that is restrained by government spending sequestration," analysts at BNP Paribas wrote in a client note. "Firmer U.S. data should bring some relief to USD longs, although we do not expect an aggressive rush into new positions until Friday's key payrolls report." Nihei of Citi said the dollar could retreat to around 98 yen, the 23.6 percent retracement of its 20 percent rally between mid-November and May 22, if the number of new jobs added in May comes in below consensus expectations for 160,000. The Australian dollar remained under pressure on Wednesday, losing 0.3 percent to $0.9617 after data showed Australia's economy grew 0.6 percent in the first quarter, slower than an average forecast of 0.8 percent in a Reuters poll. However, the Aussie pared earlier deeper losses and held some way above its 19-month trough of $0.9528 plumbed late last month. On Tuesday the Reserve Bank of Australia kept its easing bias, with its cash rate at a record low 2.75 percent. "I think many of the Asian central banks have diversified and they are still buying Aussie dollar and the bond, as it's still the highest yielding bond out of the G10 currencies," said Nikola Iliev, wealth manager at Objective Trading in Tokyo. "Anyone who doesn't want to hold too much USD ... is always waiting at the lower level to diversify," he added. The euro was at $1.3088, easing back from a one-month high of $1.3108. Resistance is seen around $1.3141, the 76.4 percent retracement level of the euro's May 1-17 fall.

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