Yen grows stronger in Asian trade
AFP Tuesday, July 22, 2014, 12:02 am TWN
SINGAPORE--The yen strengthened in Asia Monday as investors sought out lower-risk investments as a hedge against geopolitical uncertainty fuelled by the MH17 tragedy and Israel's ground offensive in Gaza, analysts said.
The dollar bought 101.20 yen in mid-afternoon trade against 101.36 yen on Friday in New York, while the euro fetched 137.06 yen compared with 137.12 yen.
The single currency was also at US$1.3544 compared with US$1.3525.
Trading was quiet with Japanese financial markets closed for a holiday.
"Whatever favorable signals are coming from second-quarter earnings reports ... a sentiment of uncertainty has returned to the markets recently," French bank Credit Agricole said in a market commentary.
"Military attacks within the Gaza strip, and growing tensions at the Ukraine/Russia border are contributing to this sense of unease," it said.
The United States has accused Moscow of involvement in the downing of Malaysia Airlines Flight 17 in Ukraine Thursday with the loss of almost 300 lives.
Russia's President Vladimir Putin has promised to cooperate in an investigation into the tragedy but there are fears that if he does not do enough the West will impose further sanctions on the country. Moscow is already subject to punitive restrictions over its support of anti-government rebels in Ukraine.
Separately on Sunday, U.S. President Barack Obama called for an "immediate cease-fire" between Israel and Hamas after a bloody day of fighting in Gaza raised the number of Palestinians killed to 476.
Singapore bank DBS said "currency markets are closely monitoring stock and bond markets for signs of risk aversion from geopolitical risks".
"With tensions in Ukraine and Gaza not expected to improve in the near future, there may be pressure on safe haven currencies to rise this week," added Phillip Futures, mentioning the yen and the Swiss franc.
In afternoon trade, the dollar was down against key Asia Pacific currencies.
It fell to 1.2410 Singapore dollars from 1.2420 Friday, to 60.195 Indian rupee from 60.35, to 43.435 Philippine pesos from 43.56 and to 11,564 Indonesian rupiah from 11,687.
The greenback was also down to 32.02 Thai baht from 32.19.
The Australian dollar climbed to 93.9 U.S. cents from 93.62 U.S. cents, while the Chinese yuan was higher at 16.306 Japanese yen from 16.300.
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