Tokyo - The yen maintained its gains against the dollar in Asia on Wednesday and emerging market currencies sagged as traders shunned risk and fled to safety on rising tensions over Syria.
The dollar bought 97.03 yen in Tokyo midday trade, largely unchanged from 97.01 yen in New York on Tuesday afternoon but sharply down from rates above 98.00 yen in Tokyo on Tuesday.
The euro bought $1.3388 and 130.08 yen compared with $1.3391 and 129.88 yen.
Emerging Asia currencies were mostly lower.
The Indian rupee, which hit a new record low of 67.22 to the dollar on Tuesday, was trading at 66.19. The Indonesian rupiah fell to 11,306 from 10,925 and the Philippine peso was down at 44.57 pesos from 44.43 pesos.
Global stocks plunged and oil prices shot up on Tuesday as the West moved closer to punitive military action against Syria for its alleged attack on civilians using chemical weapons.
High-yielding assets, such as emerging market currencies, are being dumped and money is being parked in US dollars with US Treasuries.
The West, led by the United States, is edging closer to a targeted strike on Syria, which is accused of carrying out a gas attack on August 21 that killed hundreds of civilians.
Rising tensions have pummelled global stocks as dealers run for cover, while the dollar could fall below 96.00 yen in the short term, said chief forex strategist at Citigroup Global Markets Japan, Osamu Takashima.
But he said in the mid-term it would have “complex effects on the currency pair”.
Further worsening of the situation should push up crude prices, which would damage the US economy and delay the Fed's tapering of its stimulus, which would lead to weakening in the dollar, he said.
Meanwhile, the yen could weaken on higher oil prices as Japan imports a lot of resources and is already running a trade deficit, he told Dow Jones Newswires. - Sapa-AFP