FOREX-Yen slides as modest Russia sanctions soothe worries
* Short-term safe-haven bids for yen unwind
* United States, EU impose sanctions on Russia
* Euro firm despite Russia crisis, seen as safe haven
NEW YORK, March 17 (Reuters) - The safe-haven yen fell broadly on Monday after the United States and the European Union imposed what investors saw as modest economic sanctions against Russia and Ukraine following Crimea's weekend vote to join Moscow.
The dollar, often a shelter for investors against global stresses, was also down, with the dollar index, a measure of the greenback's value against six major currencies, off 0.13 percent to 79.345 in afternoon trading.
"The market thinks, it's not so bad," said Joseph Trevisani, chief market strategist at WorldWideMarkets Online Trading in Woodcliff Lake, New Jersey. "You don't see any signs of play against the euro. If the sanctions were serious, say against Russia's oil and gas exports, you'd see selling of the euro because they don't have much alternative for energy."
Although investors are not ruling out another flare-up in tensions between Russia and Ukraine, many do not expect contagion in major markets. The absence of military conflict between the two countries also appeased investors.
Over 95 percent of Crimean voters chose in a Sunday referendum to join Russia, an outcome denounced by Western powers and Kiev as illegal and a sham.
As a result, the United States on Monday announced sanctions on 11 Russians and Ukrainians blamed for Russia's military incursion into Crimea. The U.S. order freezes any assets in the United States and bans travel to the 11 individuals named as responsible for the Russian move into Crimea.
The European Union, meanwhile, will impose sanctions including asset freezes and travel bans on 21 officials from Russia and Ukraine after Crimea applied to join Russia on Monday.
"The sanctions don't sound particularly aggressive," said Richard Franulovich, senior currency strategist at Westpac Securities in New York. "Also some of the worst case scenarios they were anticipating over the weekend, such as actual military engagement, did not really materialize."
In late New York trading, the dollar was up 0.3 percent against the yen at 101.66 yen, rising after four days of losses driven by investors buying the safe-haven Japanese currency in the midst of the Russia-Ukraine crisis.
The euro also gained 0.5 percent to 141.51 yen, and climbed against the dollar as well to $1.392, despite data showing a dip in euro zone inflation, the latest indicator to argue for outright money-printing by the European Central Bank to support growth.
Europe's common currency has traded within a cent of a 2-1/2-year high around $1.3967 since last Thursday, when ECB President Mario Draghi voiced concerns about the euro's strength.
"We have seen some tangible developments on data and from the ECB that should be negative for the euro yet it hasn't weakened substantially," said Jane Foley, a currency strategist with Rabobank in London.
"I think increasingly the euro is exhibiting safe haven properties. If, for example, money is being herded out of eastern Europe it is quite feasible that one of the first places it will go is the euro."
Another safe haven, the Swiss franc, also struggled on Monday as risk appetite improved. The euro was up 0.2 percent versus the franc at 1.2159.