* Yen steady vs USD, stays below recent three-week high
* Markets still keeping a close eye on Syria
By Masayuki Kitano
SINGAPORE, Aug 29 The safe-haven yen held steady
versus the dollar on Thursday after setting a three-week high
the previous day due to jitters over the possibility of Western
military action in Syria.
The yen had surged earlier in the week as investors
scrambled for safety amid heightened geopolitical tensions. That
had sent the dollar down to a low of 96.81 yen on Wednesday, the
greenback's lowest level versus the yen since Aug. 12.
The dollar later gained some reprieve versus the yen, and
last stood at about 97.63 yen, steady from late U.S.
trade on Wednesday.
A bounce in risky assets helped to support the dollar
against the yen, with Asian shares rising 1 percent
The greenback, however, was capped versus the yen due to
dollar-selling by Japanese players, said a trader for a European
bank in Tokyo, adding that there seemed to be some
dollar-selling by Japanese exporters ahead of the month-end.
The Australian dollar rose 0.3 percent to $0.8972.
Against the yen, the Aussie dollar rose 0.4 percent to 87.57 yen
Market sentiment still remained cautious, given the
possibility of a Western military strike against Syria.
President Barack Obama made the case on Wednesday for a
limited military strike against Syria in response to last week's
chemical weapons attack, even as he faced new obstacles with
British allies and U.S. lawmakers that could delay any imminent
"We assume that NATO military action is still the likely
scenario even if relatively limited in scope. Until there is
more clarity, our bias is to keep positioning low at the
moment," strategists at BNP Paribas wrote in a note.
The euro eased 0.1 percent versus the yen to 130.17 yen
. Against the dollar, the single currency held steady
at about $1.3335.
Overall, the recent moves in major foreign exchange pairs
have been modest compared to the sharp and damaging moves in
emerging market currencies.
First hit by outflows of funds as investors positioned for
an eventual end of easy money from the U.S. Federal Reserve,
emerging market pain has been exacerbated as heightened
geopolitical risks made investors even more risk adverse.
Combined with local policy missteps, the poisonous mix saw
currencies such as the Indian rupee and Turkish lira hit record
lows versus the dollar this week.
The Indian rupee gained some reprieve on Thursday,
however, after India's central bank said on Wednesday it would
supply dollars to oil companies through a separate window in its
latest attempt to shore up the rupee.