U.S. dollar prices rose against the yen on Tuesday, pulling away from a recent four-month low, as concerns over tensions between the United States and North Korea eased for now, supporting risk appetite. Both the yen and the Swiss franc sagged after North Korea said it had delayed a decision on a plan to fire missiles at the U.S. Pacific territory of Guam. That news helped ease investor worries about the risk of a conflict between the United States and North Korea, improving sentiment toward riskier assets. "If we continue to see the North Korea tensions kept in the background, there's some room for dollar/yen to tick up higher, perhaps to 111, maybe as far as 112," said Sim Moh Siong, FX strategist for Bank of Singapore. The dollar rose 0.6 percent to 110.26 yen, pulling away from a low of 108.72 yen set on Friday, its lowest level since April 19. Some traders said the greenback also was lifted by New York Fed President William Dudley saying in an interview that he favored another interest rate hike this year if the economic conditions evolved in line with his expectations. Against the Swiss franc, the dollar edged up 0.1 percent to 0.9734 francs. The Swiss franc extended its losses after shedding about 1.1 percent against the dollar on Monday, its biggest daily fall since July 27. The Swiss franc and the yen are often sought in times of geopolitical tension or global financial stress, partly because both Switzerland and Japan have big current account surpluses. After rising last week on investor concerns over geopolitical risks, both the Swiss franc and the yen have pulled back over the past couple of days as such worries waned. North Korea's leader has delayed a decision on firing missiles at Guam while he watches U.S. actions a little longer, the North's state media said on Tuesday, as South Korea's president said Seoul would seek to prevent war by all means. Traders and analysts said, however, said that tensions between North Korea and the United States could flare up again. Market participants will probably remain wary of such risks over the next few weeks and such caution could limit the dollar's gains against the yen, said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo. The dollar will probably trade mainly in a range of around 109 yen to 111 yen in the near term, Murata said. Source: Reuters
