April 21, 2014 / 4:05 AM / 4 years ago

FOREX-Dollar firms vs yen, but gains limited as market eyes Ukraine

* Dollar hits 2-week high vs yen after data shows Japan’s record trade deficit

* Unrest in Ukraine likely to limit safe-haven yen’s losses

* Status quo favours continued range trading for USD-strategist (Adds comments, updates levels)

By Lisa Twaronite

TOKYO, April 21 (Reuters) - The dollar edged higher versus the yen on Monday, though a tense situation in Ukraine was likely to keep traders on their toes, with some markets still closed for the Easter holiday.

The dollar rose to its highest level in nearly two weeks against the yen after data showed Japan logged a record trade deficit in the fiscal year that ended in March.

It last stood at 102.61 yen, up 0.2 percent, after rising as high as 102.71 yen.

Some traders, however, played down the impact of the Japanese trade data, saying the greenback’s move higher against the yen occurred in holiday-thinned trading conditions.

In terms of flows, a trader for a Japanese bank in Singapore said there was talk of dollar-buying against the yen by Japanese banks.

The U.S. unit also edged higher against a basket of major currencies, with the dollar index adding about 0.1 percent to 79.892.

Many markets around the world were closed on Friday ahead of Easter weekend, and some will remain closed on Monday, meaning activity is likely to be lighter than usual.

“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, 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.

Unrest in the Ukraine added to the yen’s safe-haven appeal and was likely to keep the Japanese currency’s losses in check.

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.

The euro rose 0.2 percent against its Japanese counterpart to 141.69 yen, and touched a two-week high near 141.83 yen earlier on Monday.

Against the greenback, the euro was steady at $1.3810 , though still well shy of a 3-1/2-week peak of $1.3906 marked on April 11.

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.

In the week ahead, the dollar could take its cues from U.S. housing related-data, as well as a reading on durable goods orders. The durable goods orders report on Thursday is expected to show a 2.0 percent increase in overall orders and a 1.5 percent rise in orders for core capital goods. (Additional reporting by Masayuki Kitano in Singapore; Editing by Chris Gallagher)

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