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Yen surges in Asia, leaves euro and dollar behind

TOKYO--The yen soared in Asia on Friday as U.S. President Barack Obama's announcement that he had authorized U.S. air strikes on Iraq pushed traders into the Japanese currency.

The dollar dropped to as low as 101.58 yen before recovering to 101.81 yen, but it was still well down from 102.09 yen in New York late Thursday as geopolitical tensions weighed on the unit.

The euro was also lower against the Japanese currency at 136.04 yen from 136.42 yen, while it bought US$1.3360 against US$1.3363.

Investors tend to buy the yen in times of uncertainty and turmoil.

The unit's sharp rise came after Obama said he had authorized the air strikes on Iraq and humanitarian supply drops to prevent a “genocide” by Islamist extremists against minorities.

But Obama, who was an outspoken critic of his predecessor George W. Bush's 2003 invasion of Iraq, said he was not sending background forces.

“The currency of choice amidst the turmoil was the safe haven yen,” said Chris Tedder, research analyst at Forex.com in Sydney.

Markets largely ignored the Bank of Japan's (BOJ) decision on Friday to hold off expanding its vast stimulus program following a two-day policy meeting, despite warning that the country's export and factory output picture was weakening.

The decision was widely expected and investors swiftly turned their focus to a regular post-meeting press briefing from BOJ Governor Haruhiko Kuroda.

The dollar was stronger against most other Asia-Pacific currencies.

It rose to SG$1.2537 from SG$1.2495 on Thursday, to 1,035.70 South Korean won from 1,034.80 won, to 11,812.50 Indonesian rupiah from 11,773.80 rupiah and to 44.25 Philippine pesos from 43.95 pesos.

The dollar also climbed to 61.61 Indian rupees from 61.29 rupees. It weakened to 32.21 Thai baht from 32.24 baht.

The Australian dollar slipped to 92.45 U.S. cents from 92.87 cents, while the Chinese yuan changed hands at 16.53 yen against 16.58 yen.

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