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FOREX-Yen, Swiss franc rise after attacks in Ankara, Berlin

Published 20/12/2016, 11:31 am
FOREX-Yen, Swiss franc rise after attacks in Ankara, Berlin
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* Yen, Swiss franc up on attacks in Ankara, Berlin

* Yen bought back after big fall since U.S. elections

* BOJ seen keeping its policy targets on hold

* Dollar index edges up near 14-year high

By Hideyuki Sano

TOKYO, Dec 20 (Reuters) - The yen and the Swiss franc held firm on Tuesday after two separate deadly attacks in Turkey and Germany raised security worries in the West, while the Bank of Japan's policy decision later in the day also saw buyers pile into the Japanese currency.

Investors were rattled after the Russian ambassador to Turkey was shot and killed as he gave a speech at an Ankara art gallery by an off-duty police officer. Anxiety deepened further when a truck ploughed into a crowded Christmas market in central Berlin, killing nine people. safe-haven Swiss franc hit a six-month high against the euro, fetching 1.0680 per euro EURCHF= . The Turkish lira TRYTOM=D3 dropped a tad to 3.5310 to the dollar, but it held above its record low of 3.6000 set earlier this month.

The dollar also slipped to as low as 116.55 yen JPY= on Monday, falling more than two yens from a 10-1/2-month high of 118.66 touched on Dec 15.

The U.S. currency steadied a little and was last at 117.13 yen, in part helped by upbeat comments from Federal Reserve Chair Janet Yellen on the U.S. jobs market. that the yen was sold the most since the U.S. elections, it was inevitable to see some short-covering in the yen," said Masashi Murata, senior currency strategist at Brown Brothers Harriman.

At its 10-1/2-month low hit last week, the yen was down about 11 percent since the U.S. election, edging out the Mexican peso MXN= and the Turkish lira to briefly become the worst performer after Donald Trump's surprise election victory.

Expectations that Trump's plan on tax cuts and fiscal spending could lead to higher U.S. growth and inflation lifted U.S. bond yields and undermined the yen because that could accelerate Japanese investors' buying in U.S. assets.

Traders bought back the yen also ahead of the BOJ's policy decision later in the day.

While the central bank is expected to keep its policy on hold, some players think Governor Haruhiko Kuroda could strike a more hawkish tone than before given the sharp fall in the yen since the BOJ's previous meeting.

Against many other currencies, the dollar remained supported, with the dollar's index rising back to 103.15 .DXY =USD from Monday's low of 102.52, coming within sight of its 14-year peak of 103.56 touched on Thursday.

The euro EUR= traded at $1.0401, having slipped 0.5 percent on Monday and edging near its Dec. 15 low of $1.03665, its weakest level since January 2003.

The British pound also dipped to $1.2355 GBP=D4 , its lowest in about a month and last stood at $1.2383.

The Australian dollar AUD=D4 fell to 6-1/2-month lows of $0.7241, turning negative for the year. (Editing by Shri Navaratnam)

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