* Yellen's upbeat comments support dollar
* Yen slips after BOJ keeps policy on hold
* Yen, franc see some flight-to-quality bids on security
By Hideyuki Sano
TOKYO, Dec 20 The dollar was bouncing back
towards its 14-year high against a basket of major currencies on
Tuesday as the yen quickly gave up some of its gains following
deadly incidents in Turkey and Germany.
The U.S. dollar remained well-bid against many other
currencies, with its index rising back to 103.36
from Monday's low of 102.52, coming within sight of its 14-year
peak of 103.56 touched on Thursday.
The dollar was helped in part by upbeat comments from
Federal Reserve Chair Janet Yellen on the U.S. jobs market.
Expectations that the incoming Trump Administration's
planned tax cuts and fiscal spending could lead to higher U.S.
growth and inflation has lifted U.S. bond yields and the dollar
since last month.
"The dollar is rising on expectations of Trump's policies
and I think the rally will continue as long as there are
uncertain elements to his policies," said Kazushige Kaida, head
of foreign exchange at State Street.
"But markets are starting to take it as a fact, and that
suggests the dollar's rising cycle is coming near an end. Those
who got on the bus first will be starting to get off," he added.
The euro slipped 0.2 percent to $1.0382, extending
its 0.5 percent fall 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 on Monday,
its lowest in about a month and last stood at $1.2383.
The Australian dollar fell to 6-1/2-month lows of
$0.7240, turning negative for the year.
The dollar also rose to 117.75 yen, quickly
recovering from Monday's low of 116.55 yen as fresh
buying emerged after the Bank of Japan kept monetary policy
unchanged at its meeting ending on Tuesday.
The BOJ affirmed its twin targets of minus 0.10 percent
interest on some excess reserves and the zero percent 10-year
government bond yield.
Although that outcome was widely expected, the move appeared
to set it apart from other major central banks that are scaling
The dollar's underlying strength overwhelmed
flight-to-quality buying in the yen and the Swiss franc
following two separate deadly incidents in Turkey and Germany
that raised security worries in the West.
Investors were rattled after the Russian ambassador to
Turkey was shot dead by an off-duty police officer as the
diplomat gave a speech at an Ankara art gallery.
Security fears deepened on news that a truck ploughed into a
crowded Christmas market in central Berlin, killing 12 people,
evoking memories of an attack in Nice, France, in July, in which
86 people were killed.
The safe-haven Swiss franc hit a six-month high of 1.0680
per euro on Monday and last stood at 1.0684.
The Turkish lira dropped slightly to 3.5325 to
the dollar, but it held above its record low of 3.6000 set
earlier this month, ahead of its central bank policy
announcement later in the day.
(Reporting by Hideyuki Sano; Editing by Shri Navaratnam and