* Japan posts record trade deficit, hitting yen
* Unrest in Ukraine likely to limit safe-haven yen’s losses
* Status quo favours continued range trading for USD-strategist (Updates with late New York prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 21 (Reuters) - The dollar rose to a two-week high against the yen on Monday after Japan posted a record trade deficit in the fiscal year ended in March, though tensions in Ukraine were likely to limit losses on the safe-haven Japanese currency.
The greenback is up seven straight sessions versus the yen, while the euro touched a two-week peak against the Japanese currency. Many European markets are closed due to the Easter Monday holiday, leaving market volumes low.
The yen fell after Japanese exports in March grew at just 1.8 percent compared to a year-ago, versus forecasts for a 6.3 percent gain.
The country’s trade balance stood at a deficit of 1.446 trillion yen in March, after a record trade gap of 2.79 trillion yen in January. That marked a record 21-month run of deficits.
“The weak trade figures suggested that sooner or later Tokyo may have to resort to bolder monetary policies to keep the economy on the right track,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The dollar hovered just under the session high of 102.70 yen , up 0.2 percent.
Still, losses in the yen could be tempered by fresh tensions in Ukraine. An agreement reached last week to avert a wider conflict faltered, with pro-Moscow separatist gunmen showing no sign of surrendering the government buildings they have seized.
At least three people were killed in a gunfight early on Sunday near a Ukrainian city controlled by pro-Russian separatists, shaking a fragile international peace accord.
Geopolitical uncertainty tends to support safe-haven currencies such as the yen. A trader for a Japanese bank in Singapore said there was talk of dollar-buying against the yen by Japanese banks.
The dollar index, which measures the greenback against a basket of major currencies, added 0.17 percent to 79.962.
“The greenback’s gains are consistent with our caution last week against playing for a breakout as key support for the dollar had been approached,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said in a note to clients.
“The issue remains the same for the week ahead. Assuming no exogenous shocks, such data or comments that require a significant reassessment of the macro-view, that is to say, the continued status quo favours continued range trading,” Chandler added.
The euro rose 0.13 percent to 141.50 yen, after touching a two-week high of 141.82 earlier on Monday.
The euro slipped 0.15 percent to $1.3792, its weakest point since April 9.
The euro hit a 2-1/2-year high near $1.40 last month, prompting European Central Bank officials to express their concern that a strengthening currency could damage the euro zone’s nascent recovery. (Additional reporting by Daniel Bases in New York, Lisa Twaronite in Tokyo; Editing by Meredith Mazzilli and Nick Zieminski)