* Yen rises after U.S.'s Kerry hints response on Crimea vote
* Euro retreats from 2-1/2 year highs vs U.S. dollar
* Euro seen gaining status as price gauge - ECB's Draghi
* Kiwi rallies on rate hike, jobs data boosts Aussie
By Richard Leong
NEW YORK, March 13 The yen rose against the euro
and the dollar on Thursday after U.S. Secretary of State John
Kerry signaled a possible response from the West if a referendum
in Ukraine's Crimea region goes ahead on Sunday.
Kerry's comments before Congress, together with a warning by
Ukraine's acting president Oleksander Turchinov of a possible
Russian invasion, rekindled fears of a war breaking out in the
region. This led anxious investors to dump stocks and risky
assets in favor of the yen, Swiss franc and other perceived
"You saw a bid for yen on Kerry's comments. It crystallizes
the idea that on Monday there could a serious response," said
Lou Brien, market strategist with DRW Trading in Chicago.
The United States and the European Union will respond on
Monday with a "serious series of steps" against Russia if a
referendum in Ukraine's Crimea region goes ahead on Sunday,
Kerry told a congressional hearing.
Ukrainian acting president Turchinov told a local television
station Russian forces were concentrated on the border "ready to
invade," but he believed international efforts could end
Moscow's "aggression" and avert the risk of war.
The yen climbed 1.1 percent against the dollar at 101.66 yen
after hitting a one-week high at 101.56 in late U.S.
trading. It gained 1.4 percent versus the euro to one-week
peaks, last at 140.90 yen..
Safe-haven bids also benefited the Swiss franc, which
reached a near 2-1/2-year high versus the greenback at 0.8699
franc before easing in late U.S. trading. It strengthened
0.2 percent against the euro at 1.213 francs.
The euro weakened against the dollar, last 0.3 percent lower
at $1.3858. Earlier, gains propelled the common currency
to a 2-1/2-year high against the greenback at $1.3967.
Escalating conflict in Crimea and possible ripple effects on
Europe overshadowed optimism that the region has put recession
and its debt crisis behind.
Comments about exchange rates from European Central Bank
President Mario Draghi further pressured the euro in late U.S.
trading, putting it on track for its biggest one-day loss
against the yen in nine months. It was last down 1.41 percent at
"Any material risk of inflation expectations becoming
unanchored will be countered with additional monetary policy
measures," Draghi said in a speech at an award ceremony in
He added the euro's exchange rate is becoming more important
among policymakers to gauge the region's price stability.
KIWI, AUSSIE REBOUND
Among other major currencies, the New Zealand and Australian
dollars surged before worries about Ukraine reduced their gains.
The kiwi had risen to its strongest against the dollar in 10
months after the New Zealand central bank hiked interest rates,
and signaled more to come, as its economy has gained traction.
Surprisingly strong employment data lifted the Aussie by more
than 1 percent against the greenback.
The kiwi and Aussie currencies suffered earlier this week on
a dramatic selloff in copper and other commodities due to
growing concerns over the Chinese economy, a major driver of
demand for Australia's huge mining sector.
The latest Chinese economic data was lukewarm at best.
Industrial output missed market expectations, and growth in
retail sales also fell short of forecasts.
"The numbers out of China were not impressive by all means,
but it was not bad enough for players to create big fresh 'risk
off' positions - thus currency reaction was limited," said a
trader at a large Japanese bank in Tokyo.
Earlier the Reserve Bank of New Zealand (RBNZ) delivered a
widely expected interest rate hike and flagged that a further
100 basis points of tightening was possible this year.
That pushed the New Zealand dollar up to $0.8607,
its highest since May 2013 before easing to $0.8540, up 0.2
percent on the day. The kiwi turned weaker against the yen at
86.80 after setting fresh six-year high earlier.
"Today's communication strongly suggests the RBNZ will be on
the front foot for the next few meetings," Michael Turner,
strategist at RBC in Sydney, said.
In the meantime, the Australian government reported 47,300
jobs were created in February, more than double market
The Aussie was last up 0.4 percent at $0.9023, more
than halving its earlier rise against the U.S. dollar.