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USD/JPY gains as market bets on waning Ukraine impasse

Published 03/17/2014, 12:26 PM
Updated 03/17/2014, 12:27 PM
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Investing.com - The dollar rose against the yen on Monday despite hit-or-miss data out of the U.S., as markets bet sanctions slapped on Russia due to Crimea's vote to secede from Ukraine were somewhat softer than expected and won't escalate the standoff further.

The yen has served as a safe-haven asset of choice amid the Ukraine crisis and also due to soft Chinese economic indicators.

In U.S. trading, USD/JPY was up 0.27% and trading at 101.62, up from a session low of 101.28 and off a high of 101.87.

The pair was expected to test support at 101.21, Friday's low, and resistance at 103.42, Tuesday's high.

Investors continued to monitor events in Europe, after over 90% of Crimean voters on Sunday chose to break with Ukraine and join Russia. Crimea's Parliament on Monday formally asked to join the Russian Federation.

European Union foreign ministers imposed travel bans and asset freezes on 21 people they have linked to the push to have Crimea secede from Ukraine to maybe be annexed by Russia. U.S. President Barack Obama also imposed sanctions on several Russian officials involved in the incursion of Crimea, which included freezing assets in the U.S.

Still, markets were expecting more widespread action from the West, and the response enticed investors out of safe-haven yen positions and gave the greenback room to rise despite conflicting economic indicators out of the U.S.

Data revealed earlier that U.S. industrial production rose 0.6% in February, exceeding expectations for a 0.1% gain. Industrial production in January was revised to a 0.2% fall from a previously estimated 0.3% decline.

In a separate report, the Federal Reserve Bank of New York said its Empire State manufacturing index ticked up to 5.6 this month from 4.5 in February, missing expectations for a rise to 6.0.

The yen, meanwhile, was down against the euro and down against the pound, with EUR/JPY up 0.37% at 141.54, and GBP/JPY trading up 0.25% at 169.16.

On Tuesday, the U.S. is to produce data on consumer inflation as reports on building permits and housing starts.

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