Yen Sheds Safe-Haven Appeal as Optimism Grows Over Crimea

By Dow Jones Business News, March 24, 2014, 02:25:00 AM EDT

By Kosaku Narioka

The safe-haven yen fell against other major currencies Monday in Asia as there was cautious optimism that geopolitical tensions between Russia and the West over Crimea won't get much worse.

President Vladimir Putin formally made Crimea part of Russia on Friday, but the Kremlin also sent contradictory signals on whether it would retaliate against the West for sanctions over the annexation.

Officials from the Group of Seven leading nations will meet in the Hague on Monday to discuss Russia's recent moves.

"There is a growing view that further sanctions won't be that aggressive," said Motonari Ogawa, senior dealer at Barclays Bank in Tokyo.

Kosuke Hanao, head of FX at HSBC in Tokyo, noted that some traders had been cutting risky positions ahead of the weekend because they weren't sure what would happen with the Russian situation.

The dollar rose to Y102.48 as of 0500 GMT from Y102.27 late Friday in New York, according to EBS. The euro climbed to Y141.43 from Y140.98. Another traditional safe haven currency, the Swiss franc, also fell. The euro rose to CHF1.2188 from CHF1.2174.

Meanwhile, fears ebbed over an early hike by the Federal Reserve, helping stocks and reducing the appeal of safe-haven assets.

Last week, the meeting results of the Federal Open Market Committee meeting showed that 10 of 16 Fed officials saw the benchmark interest rate rising to 1% or more by the end of 2015, a slight uptick from projections made in December.

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Yen Sheds Safe-Haven Appeal as Optimism Grows Over Crimea