Yen firms in Asia on Iraq, Ukraine jitters

TOKYO: Traders bought the yen on Monday in Asia as fears grow about violent unrest in Iraq and possible gas supply disruptions in Europe tied to the Ukraine crisis.

In Tokyo midday trading, the dollar weakened to 101.86 yen compared with 102.04 yen in US trade Friday, while the euro slipped to 137.89 yen from 138.16 yen.

The European single currency was almost flat at $1.3539 from $1.3538 in US trade.

Investors are nervously tracking events in Iraq as Islamic militants sweep though the country, taking over key cities and moving towards Baghdad as US-trained Iraqi government forces crumble.

Markets were also jittery as Europe faced gas supply disruptions Monday after Ukraine failed to broker an 11th-hour deal with Russia in a feud that has stoked the worst East-West crisis since the Cold War.

Ukraine hosted the last-gasp talks hoping to keep an energy shortage from compounding the new pro-Western leaders´ problems as they confront a two-month separatist insurgency threatening the survival of their ex-Soviet state.

The geopolitical jitters pushed traders into the yen, which tends to be bought as a safe-haven currency during times of turmoil and uncertainty.

A meeting of the Federal Reserve´s policy setting committee and fresh economic data, including US industrial production and housing starts, were also on investors´ radar screens for later in the week.