AP FILE PHOTO
TOKYO – The dollar stabilized Monday morning, following a sharp drop against the yen after last week’s announcement that US President Barack Obama had authorized air strikes in Iraq.
The dollar strengthened to 102.17 yen in Tokyo morning trade, against 102.06 yen in New York late Friday and 101.81 yen in Tokyo Friday afternoon.
The euro was quoted at $1.3399 and 136.91 yen against 1.3416 and 136.93 yen in New York.
“Players bought back the dollar after the market is factoring in the situations in Iraq and Ukraine,” said Yosuke Hosokawa, head of FX sales team at Sumitomo Mitsui Trust Bank.
“Risk-averting moves are being subdued for now,” Hosokawa said.
“The dollar is expected to be steady in a limited range, but players still need to keep watching geopolitical factors,” he added.
The yen surged on Friday after Obama said he had authorized the air strikes on Iraq and humanitarian supply drops to prevent a “genocide” by Islamist extremists against minorities.
Investors tend to buy the yen in times of uncertainty and turmoil.
But Obama, who was an outspoken critic of his predecessor George W. Bush’s 2003 invasion of Iraq, said he was not sending back ground forces.
On Sunday, Ukraine’s army shelled the main rebel bastion of Donetsk as Russia called for a humanitarian ceasefire, which the West warned could be a pretext by Moscow to send in troops.