* Fresh uncertainty towards French elections adds to risk
* Yen hits five-month highs vs dollar, euro, sterling and
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Jemima Kelly
LONDON, April 12 The yen hit five-month highs
against the dollar, euro and sterling on Wednesday, as simmering
geopolitical tensions checked risk appetite and put the
safe-haven Japanese currency in favour.
Investors' flight-to-safety underpinned traditional
safe-havens like the yen, U.S. Treasuries and gold, amid fresh
worries over France's presidential election, and possible U.S.
military action against Syria and North Korea.
"It cannot come as a surprise that the financial markets are
fully focused on political developments and investors are
increasingly looking for safe havens as a result," wrote
Commerzbank currency strategists in a research note. "In the FX
markets it is mainly the Japanese yen that is benefitting from
this development - not exactly a major surprise."
"What is more surprising is that the dollar, which is
usually in demand in uncertain times, has not been able to
appreciate. That is probably mainly due to the fact that the
United States is at the centre of these geopolitical risks."
The dollar fell on Tuesday and added to those losses on
Wednesday, edging down 0.1 percent against a basket of major
currencies to 100.62.
North Korean state media threatened a nuclear attack on the
United States at any sign of American aggression on Tuesday,
while U.S. President Donald Trump tweeted that Pyongyang was
"looking for trouble" and the United States would "solve the
problem" with or without China's help.
Trump's administration also accused Russia of trying to
shield Syria's government from blame for a deadly gas attack, as
Secretary of State Rex Tillerson brought a Western message to
Moscow condemning its support for President Bashar al-Assad.
The Japanese currency had gained over 1 percent on Tuesday,
with the dollar falling below 110 yen for the first time since
mid-November, and it extended those gains on Wednesday,
trading as strongly as 109.35 yen to the dollar in Asian
In European trade it had come off those highs but was still
up 0.1 percent on the day, at 109.625.
It was a little down against the euro after earlier hitting
"There was a lot of bids and option barriers lined up around
110 yen, so a breach of this level shows how widespread the
latest dollar selling was," said Junichi Ishikawa, senior forex
strategist at IG Securities in Tokyo.
"The yen's gains against the euro also bears watching, with
uncertainty towards the French presidential elections clearly
the driving factor."
And in a new twist to the French elections, a far-left
veteran who had been written off as a long shot has now surged
into the top four, pushing some pollsters to calculate the most
extreme runoff scenarios.
The euro edged up against a struggling dollar to $1.0617
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Reporting by Jemima Kelly; Editing by Andrew Heavens)