• Dollar, euro up as Japan, US, EU sanction Putin

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    TOKYO: The dollar and euro rose against the yen in Asia Tuesday as investors took in their stride Crimea’s vote to leave Ukraine and join Russia as the West announce sanctions against Moscow officials.

    The greenback fetched 101.79 in Tokyo morning trade, up from 101.68 yen in New York Monday afternoon.

    The euro also rose to 141.77 yen from 141.58 yen in US trade, and $1.3930 from $1.3921, despite weak eurozone inflation data.

    The yen, a low-risk and safe resort in times of uncertainty, surged last week ahead of Sunday’s referendum but analysts said the outcome was widely expected and dealers were turning to economic matters closer to home.

    Russian President Vladimir Putin on Monday signed a decree recognising Crimea as an independent state after the vote to secede, which has fanned the worst crisis between Russia and the West since the Cold War.

    The United States and European Union on Monday slapped Russian President Vladimir Putin’s inner circle with economic sanctions while the White House warned of more to come if Moscow continues to interfere in Ukraine. Japan followed suit Tuesday with a set of its own sanctions against Russia.

    “The conflict is far from over. But markets don’t regard the situation as critical,” said Kengo Suzuki, chief FX strategist at Mizuho Securities.

    With the dollar gaining broadly, and US stocks and bond yields rising, “sentiment is turning to a risk-on mode”, he told Dow Jones Newswires.

    US traders were buoyed by data showing industrial output increased more than expected in February, adding to a growing feeling that the world’s number one economy is on a recovery track.

    The news comes as the Federal Reserve begins a two-day policy meeting Tuesday, the first to be chaired by the bank’s new chief Janet Yellen.

    She is expected to further cut the bank’s stimulus programme but investors will be closely watching her post-meeting news conference as they look for clues about future policy.

    The euro’s rise came despite eurozone February inflation coming in at 0.7 percent, lower than an initial estimate of 0.8 percent, adding to concerns of deflation in the 18-member bloc.

    AFP

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