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 101.26 yen in midday trade against 101.36 yen on Friday in New York, while the euro fetched 137.040 yen compared with 137.12 yen.
The single currency was also at $1.3532 compared with $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.
Russian President Vladimir Putin has promised to cooperate in an investigation into the tragedy but there are fears that if it 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, US President Barack Obama called for an “immediate ceasefire” 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”.
“Both issues are unlikely to be resolved anytime soon,” DBS said.