February 9, 2015 / 8:27 PM / 4 years ago

FOREX-Yen gains as investors fret about Greece, Ukraine

(Updates prices, adds quote)

* Yen rises after two days of losses

* Focus on Greece and Ukraine in absence of economic data

By Gertrude Chavez-Dreyfuss

NEW YORK, Feb 9 (Reuters) - The yen advanced against the dollar and euro on Monday as investors sought safety in the Japanese currency on worries about the conflict in Ukraine and Greece’s future in the eurozone.

The yen rose after two straight days of losses against the dollar and so far this year has gained 0.7 percent. It took a beating on Friday after a strong U.S. jobs report rekindled optimism about a rate rise by the Federal Reserve this year.

Greek Prime Minister Alexis Tsipras, in his first major speech to parliament, on Sunday laid out plans to dismantle the “cruel” austerity program imposed on the country by international lenders. He ruled out any extension of Greece’s bailout, setting himself on a collision course with his European partners.

“If Greece should eventually leave the euro, it could mean much uncertainty and a period of turmoil for markets,” said Joe Manimbo, senior market analyst of Western Union Business Solutions in Washington.

German Chancellor Angela Merkel, meanwhile, met U.S. President Barack Obama and discussed, among others, the conflict in Ukraine, where nine troops and seven civilians have been killed in the past 24 hours alone.

In late New York trading, the dollar was down 0.6 percent at 118.37 yen. The Japanese currency, seen as a safe haven in times of heightened investor anxiety, had fallen 1.4 percent on Friday as the greenback rallied on robust U.S. jobs data.

The euro on the other hand was down 0.3 percent at 134.14 yen. The yen also rose after strong Japanese consumer sentiment data and comments from a Bank of Japan policymaker, who said the country would not slip back into deflation.

Against the dollar, however, the euro was up 0.2 percent at $1.1326, although the overall outlook for the euro zone remained negative.

Eurozone finance ministers meet on Wednesday at the Eurogroup gathering, where the Greek finance minister has said he will present a comprehensive proposal. The European Council meeting takes place the following day.

The dollar index was down 0.2 percent at 94.475, as investors re-assessed bullish bets on the greenback after having rallied the last six months.

“The dollar is still about 5-7 percent overvalued,” said Mark McCormick, currency strategist at Credit Agricole in New York. “What we’re seeing is that market positioning is coming off a little bit. The valuations are playing into that a little bit.” (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Jemima Kelly in London; Editing by Chizu Nomiyama)

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