TOKYO- The yen rose in Asia Monday as tensions in Ukraine flared and as the Bank of Japan (BoJ) starts a two-day meeting, with investors looking for signs of further monetary easing.
In Tokyo morning trade, the dollar fetched 103.06 yen, down from 103.24 yen in New York Friday afternoon.
The euro, which rose last week on the European Central Bank’s upbeat outlook for the eurozone, fell to 143.11 yen from 143.31 yen, while it firmed to $1.3885 from $1.3874.
Traders moved into the yen, seen as a safe-haven currency in times of turmoil, as fresh tensions erupted in the Ukraine crisis.
While further BoJ easing measures would tend to weaken the Japanese unit, few analysts expect the central bank to act after its meeting wraps up Tuesday.
“Since expectations among foreign investors are also low, it’s unlikely that the dollar will fall wildly even if the bank stands pat on its policy,” a senior Tokyo bank dealer told Dow Jones Newswires.
But there is growing speculation that an April sales tax rise will force the BoJ to act later this year to counter a slowdown in consumer spending and the economy as a whole.
“The Bank of Japan will almost certainly maintain its current policy settings at the conclusion of the two-day March board meeting,” Capital Economics said.
“It will be interesting to see whether geopolitics is added to the list of risks to Japan in the light of events in Ukraine. But overall, nothing has happened since the last meeting just three weeks ago to justify a policy re-think.”
On Sunday, pro-Russian activists with clubs and whips clashed with pro-Kiev supporters as tens of thousands rallied across Ukraine in rival protests, and Russian President Vladimir Putin dug in his heels in the standoff with the West.
Diplomatic talks to solve the worst post-Cold War crisis between Russia and the West have brought little except mutual accusations and grave warnings.
The crisis flared when Russian lawmakers agreed to send troops into the mainly Russian-speaking Crimean peninsula after the ousting of Ukraine’s pro-Moscow government.
An improvement in US job creation in February reassured analysts that the economy is on track to recovery, but the impact was insufficient to drive a dollar rebound.
The US jobs report endorsed the view that the Federal Reserve will continue cutting its stimulus back slowly, which is a plus for the greenback.