(Reuters) - The dollar hit a four-week high against the yen on Tuesday and rose to a five-week peak against a basket of currencies amid growing optimism that U.S. jobs data later this week would bolster the chances that the Federal Reserve will scale back stimulus measures sooner than expected. Growing expectations about a reduction in the Fed's quantitative easing program have lifted U.S. bond yields and enhanced the appeal of dollar assets, especially as other major central banks continue to lean toward further monetary easing. Investors on Tuesday also took out reported options barriers at 100 yen, while pushing the greenback to its highest level against the Canadian dollar in 21 months. "There's still a bias overall for a stronger dollar because of tapering expectations," said Brian Kim, currency strategist, at RBS Securities in Stamford, Connecticut. "Although some Federal Reserve officials have tried to temper these expectations, the market view is that tapering will come sooner than later." The dollar rose 0.7 percent to 100.29 yen, after hitting a peak of 100.38 yen, its highest since June 5. The greenback's gains gathered momentum on Monday with data showing a rebound in U.S. manufacturing activity. Traders said there are stops just above the 100.32 high, citing bids in the 98.80-99.00 area. The U.S. non-farm payrolls report is the key focus of the market, with investors expecting new jobs of 165,000 for June and a lower unemployment rate of 7.5 percent "Another decent reading of jobs growth would keep the prospect of Fed tapering squarely on the table and keep the dollar moving broadly higher," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. The dollar index .DXY hit a five-week high of 83.478 and was last at 83.447, up 0.5 percent. The euro fell to $1.3001, down 0.5 percent. Resistance is still at the 200-day moving average at $1.3074, with traders wary before a European Central Bank meeting on Thursday. U.S. factory order data for May is due on Tuesday. Good data of late has been helping the dollar, especially against the yen, which in turn is expected to lose ground as the Bank of Japan adds trillions through its quantitative easing program. Meanwhile, the Australian dollar fell 0.9 percent to US$0.9149, just above Monday's three-year low of US$0.9110, after the Reserve Bank of Australia kept the door open to rate cuts, in part due to a still-high currency. The Canadian dollar also stayed on the defensive, with the greenback hitting a 21-month high of C$1.0578. The U.S. dollar was last at C$1.0562, up 0.6 percent. (Additional reporting by Anirban Nag in London; Editing by Theodore d'Afflisio)

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