Yen firm in Asia on Ukraine tensions

TOKYO- The yen held firm in Asia Monday as jittery investors watched the latest developments in the Ukraine crisis, while awaiting meetings of the US and Japanese central banks this week.

In afternoon Tokyo trading, the dollar was changing hands at 102.17 yen against 102.19 yen in New York late Friday, while the euro inched down to 141.23 yen from 141.36 yen. Traders tend to move into the safe-haven yen during times of turmoil or uncertainty.

The European single currency slipped to $1.3824 from $1.3832.

In Ukraine pro-Russian militants in the country presented a captured team of international observers as “prisoners of war” Sunday, raising the stakes in the crisis as US president Barack Obama warned Moscow against “provocation”.

He said Russia had “not lifted a finger” to implement a peace deal struck in Geneva on April 17 to ease the crisis, adding that Moscow faced “consequences, and those consequences will continue to grow”.

Obama and his Western allies are planning a new round of sanctions against Moscow that could be introduced as early as Monday.

The escalating crisis saw Moscow last week order new military exercises on the border of Ukraine and warn of “consequences” after Kiev launched a deadly assault against pro-Kremlin rebels occupying a flashpoint town.

There are fears Moscow is planning to take over more Russian-speaking parts of Ukraine in a similar way to that which saw it absorb Crimea last month.

“It is certainly causing a bit of defensive trading,” OMF Senior Client Advisor Stuart Ive said.

The Federal Reserve holds a two-day meeting this week, with markets looking for hints from the US central bank about the state of the world’s biggest economy and any change to its stimulus tapering.

The Bank of Japan’s meeting will also be pored over for any new clues about the Asian giant’s economy and its plans for its own stimulus scheme.

The dollar was lower against other Asia-Pacific currencies.

The dollar slipped to 44.57 Philippine pesos from 44.68 pesos on Friday, to Sg$1.2563 from Sg$1.2580, and to 1,036.15 South Korean won from 1,040.75 won.

The greenback edged down to 11,582 Indonesian rupiah from 11,585 rupiah, to Tw$30.26 from Tw$30.30, and to 32.23 Thai baht from 32.34 baht.

The Australian dollar was at 92.81 US cents against 92.79 cents, while the Chinese yuan slipped to 16.31 yen from 16.34 yen.