* Yen continues to lose safe-haven glow
* Focus on Putin speech later in session
* U.S. CPI, housing-related data awaited
By Shinichi Saoshiro
TOKYO, March 18 The safe-haven yen was on the
defensive and the euro stood firm in early trade on Tuesday as
anxiety over the Ukraine crisis ebbed for the time being.
Economic sanctions imposed by the United States and the
European Union against Russia following Crimea's weekend vote to
join Moscow were seen as too modest to dramatically escalate
near-term tensions over the former Soviet republics - reducing
demand for flight-to-safety currencies such as the yen and the
The dollar edged up 0.1 percent to 101.88 yen,
pulling further away from a recent trough near 101.20 yen hit on
Friday, helped by a rise in U.S. Treasury yields as safety
demand for government debt receded. Bond yields fall as prices
The euro stood at $1.3927, within reach of a
2-1/2-year high around $1.3967 hit Thursday on diminished
expectations of easing by the European Central Bank.
After Sunday's referendum in Crimea in which an overwhelming
majority of voters chose to join Russia, the United States and
European Union on Monday imposed personal sanctions on Russian
and Crimean officials involved in the seizure of Crimea from
"In immediate focus is Russian president Putin's speech
later today. If he plays down an immediate annexation of Crimea
by Russia, the dollar could gain further ground on unwinding of
risk aversion," said Masafumi Yamamoto, chief strategist at
Praevidentia Strategy in Tokyo.
"But an expression of desire for a swift annexation and
retaliation against sanctions placed by the European Union and
the United States will rekindle economic fears, driving U.S.
government bond yields lower and weighing on the dollar," he
President Vladimir Putin on Tuesday will address a special
joint session of Russia's State Duma, or parliament, which could
take a decision on annexation of the majority ethnic-Russian
With Crimea seemingly set to split from Ukraine, market
players are watching eastern Ukraine and the possibility of
Moscow's involvement in the region with a large population of
With Russia's armed forces holding war games near the border
and Moscow threatening to intervene to halt violence against
Russians in Ukraine, some fear Putin will not stop at Crimea and
may try to grab more territory in the east and south.
Market players said any re-emergence of tensions would
support the yen and Swiss franc.
Against the Swiss franc, the dollar traded at 0.8734,
pulling further away from a 2-1/2-year low of 0.8696 hit last
week as investor risk aversion ebbed for the moment.
The dollar index, a measure of the greenback's value against
six major currencies, was at 79.376, edging up from a four-month
low of 79.268 hit last week.
Investors will watch the U.S. consumer price index and
housing-related dated due later in the session for clues to the
dollar's likely direction.