* U.S. Treasury yields inch higher, pull away from 14-month low
* Euro slips ahead of German ZEW sentiment survey
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, Aug 12 (Reuters) - The dollar edged higher in Asia on Tuesday, getting a slight lift as U.S. Treasury yields inched away from recent lows, though concerns over rising tensions in Ukraine and the Middle East still looked set to cap the greenback’s advance.
The dollar index rose about 0.1 percent to 81.519.
Traders said the index was looking toppish as last month’s rally swept it past a succession of 2014 peaks, and the market would probably need fresh impetus to push it further.
U.S. Treasury yields pulled slightly away from recent lows, with the yield on the benchmark 10-year U.S. Treasury note at 2.431 percent in Asia, above its U.S. close of 2.420 percent on Monday. On Friday, it fell to 2.349 percent, a level not seen since June 2013.
The safe-haven yen stayed off highs notched late last week when concerns over geopolitical tensions were more acute.
The euro was steady on the day at 136.79 yen, well off a trough of 135.73 yen plumbed on Friday, which was its lowest level since November.
The dollar bought 102.29 yen, adding about 0.1 percent and pulling away from Friday’s two-week low of 101.51 yen.
“Demand for dollars seems to be higher than some people expected, around 102,” said Kaneo Ogino, director at Global-info Co. in Tokyo, a foreign exchange research firm.
Trading was quiet in Tokyo, however, with many people away from work for the Obon season to commemorate ancestors.
Geopolitical risks kept markets watchful.
In Iraq, a new political crisis was brewing just days after Washington launched its first military action against insurgents from the Islamic State.
Iraq on Monday named Haidar al-Abadi as the new prime minister to end the eight-year rule of Nuri al-Maliki, but Maliki has refused to go and deployed special forces to force a dangerous political showdown in Baghdad.
While in Ukraine, a Russian convoy of 280 trucks carrying humanitarian aid set off on Tuesday amid Western warnings against using help as a pretext for an invasion.
Global tensions as well as concerns about the impact of sanctions against Russia will probably be reflected in a closely watched ZEW sentiment survey in Germany due later in the day, analysts at BNP Paribas said.
“We expect the headline expectations measure to fall to its lowest levels since the immediate aftermath of the EUR crisis in early 2013,” they wrote in a note to clients.
Such an outcome might keep the euro under pressure, traders said. The common currency last traded at $1.3373, down about 0.1 percent and still struggling after hitting a nine-month low of $1.3333 on Wednesday.
The Canadian dollar was one of the best performing major currencies overnight, thanks to an unexpected rise in the country’s housing starts.
Canada’s housing starts rose to 200,098 last month from a upwardly revised 198,665 units in June, beating forecasts for 193,000.
The loonie climbed about 0.2 percent in Asia to C$1.0936 per U.S. dollar. (Editing by Shri Navaratnam and Simon Cameron-Moore)