* Dollar index hovers near Thursday's 4-week high
* Yen supported by Japan exporter flows, soft Nikkei
* But yen's gains limited as recent risk-off moves ebb
* Syria uncertainty persists, but less of a worry for now
By Masayuki Kitano
SINGAPORE, Aug 30 The dollar held steady near a
four-week high versus a basket of currencies on Friday after
having rallied on upbeat U.S. economic data, while the yen was
supported by month-end flows from Japanese exporters.
The dollar eased 0.1 percent versus the yen to 98.26 yen
, having backed off an intraday high of 98.48 yen.
Traders said dollar-selling by Japanese exporters at the
month-end helped to cap the greenback's moves versus the yen.
The Japanese currency, which has been locked in an inverse
correlation with Tokyo shares for months, also gained some
support as the benchmark Nikkei share average sagged 0.6 percent
The yen's rise was limited, however, as safe-haven bids
ebbed as emerging Asian currencies such as the Indian rupee
and Indonesian rupiah regained a bit of calm
after a sell-off earlier in the week.
"Things have settled down compared to the situation we saw
before, in which Asian currencies were sold off," said a trader
for a Japanese bank in Singapore.
Given the relative calm in emerging Asian currencies and
stock markets, sentiment was unlikely to tilt too strongly in
the direction of yen buying, the trader added.
Jitters about Syria were also temporarily put aside after
the British parliament rejected a motion supporting military
action, a setback to Western governments looking to punish
President Bashar al-Assad for what they believe was his use of
chemical weapons against civilians.
Following the parliamentary vote, British Defence Secretary
Philip Hammond confirmed Britain would not be involved in any
action against Syria.
Moves among major currencies were subdued overall, with the
dollar index holding steady at 81.955, having set a high
of 82.067 on Thursday, its highest level since Aug. 5, or
highest in nearly four weeks.
The dollar had risen broadly on Thursday, partly due to an
upward revision to second-quarter U.S. economic growth, which
bolstered the case for the Federal Reserve to begin winding down
stimulus next month.
The euro held steady near $1.3243, holding above
Thursday's two-week low of $1.3219.
The euro has support at the Aug. 15 trough around $1.3205. A
break there will pave the way for a retest of the Aug. 2 low of
Emerging market currencies were off their recent lows as
authorities in the worst-hit centres were forced into action to
This week alone, India, Indonesia and Brazil acted to stem
an outflow of funds from their markets, which have fallen on
hard times as investors moved to position for a world with less
easy money from major central banks.
On Thursday, Indonesia's central bank raised its main
interest rates for a third time in four months after the rupiah
currency slumped to its lowest level in more than four
years earlier this week.