* Dollar/yen pulls up from previous day's 1-month low
* But concerns about Ukraine may keep yen supported
* Aussie eases after RBA says it remains high by historical
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, March 4 The yen slipped on
Tuesday, taking a breather from its recent rally that was
sparked by investors flocking to the safe-haven currency, but
tensions over Russian military intervention in Ukraine were seen
likely to lend it support in the near term.
The dollar edged up 0.2 percent to 101.60 yen, edging
away from a one-month low of 101.20 yen set on Monday. The euro
rose 0.2 percent to 139.56 yen.
Russian President Vladimir Putin's forces have tightened
their grip on the Russian-speaking Crimea region, a move
described by U.S. President Barack Obama as a violation of
international law and of Ukraine's sovereignty.
Risk sentiment remained subdued due to the heightened
geopolitical tensions, which has helped give the yen a lift in
"Unless Russia withdraws its forces, I think this is a topic
that is likely to persist. It's probably a long road until there
is a resolution, and sentiment will probably head gradually
toward risk-off," said a Singapore-based trader for a Japanese
The dollar could fall further against the yen if risk
sentiment worsens further, although the yen's gains could be
limited by speculation that the Bank of Japan might eventually
step up its monetary stimulus, said Sim Moh Siong, FX strategist
for Bank of Singapore.
"I think in the back of the market's mind...is always the
backstop, in terms of BOJ," Sim said.
Many market participants expect the BOJ to take further
easing steps at some point to achieve its 2 percent inflation
target, although expectations for the central bank to act soon
have faded recently as BOJ Governor Haruhiko Kuroda remains
doggedly positive that the economy is improving.
"If the Ukraine situation escalates, and that leads to a
global risk-off, and perhaps higher oil prices as
well...Japanese policymakers would have to reassess the economic
impact on Japan and that may prompt a policy response," he
The tensions over Russian military intervention on the
Crimean peninsula have rattled oil markets, with U.S. crude
rising to its highest settlement price in 5-1/2 months on
The euro held steady at $1.3730, having pulled back
from a two-month high of around $1.3825 set on Friday, when
data showed inflation held steady in the euro zone and cooled
expectations the European Central Bank might ease monetary
policy at its March 6 policy meeting.
A batch of encouraging U.S. economic data on Monday, helped
lend support to the dollar.
U.S. factory activity rebounded from an eight-month low last
month and consumer spending increased more than expected in
January, suggesting the economy was regaining some strength
after abruptly slowing in recent months.
"The overall tone of the data is optimistic with the major
sentiment surveys surprising to the upside. Hence this should
alleviate some of the weather-related concerns and be
USD-supportive," JPMorgan analysts wrote in a note to clients.
Trading in the Australian dollar was somewhat choppy after
the Reserve Bank of Australia kept interest rates steady at a
record low of 2.50 percent, as widely expected, and reiterated
that the most prudent course for policy was likely a period of
The Aussie dollar rose to around $0.8970 or so right after
the RBA decision, but later faltered after the RBA said in its
post-meeting statement that the Australian dollar's exchange
rate remains high by historical standards.
The Australian dollar was last down 0.1 percent on the day
at $0.8925, but remained above a one-month low of
$0.8891 that had been set on Monday.