Moscow had denied that the exercises, which began last week and ended on schedule, had anything to do with events in Ukraine, where Putin has said he has the right to deploy troops to protect Russian compatriots. There was no news of Russian troop movements in Crimea. The euro rose 0.1 percent to $1.3752, after rising to about $1.3767 at one point. Against the yen, the euro gained 0.4 percent to 139.96 yen, having risen to as high as 140.35 yen at one point.
The safe-haven yen slipped broadly, helping the dollar rise 0.3 percent to 101.75 yen. The greenback pulled away from a one-month low of 101.20 yen that had been set on Monday. "There is some unwinding of long positions in the yen and long positions in the Swiss franc, but it's hard to tell at this point if the trend has changed," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore. Risk sentiment has been hit of late by the crisis over Russian military intervention in Ukraine, boosting safe haven currencies such as the yen and the Swiss franc.
Russian President Vladimir Putin's forces have tightened their grip on the Russian-speaking Crimea region, a move described by US President Barack Obama as a violation of international law and of Ukraine's sovereignty. The dollar could extend its recent fall against the yen if risk sentiment worsens further, although the yen's gains could be limited by speculation that the Bank of Japan might eventually step up its monetary stimulus, said Sim Moh Siong, FX strategist for Bank of Singapore.
"I think in the back of the market's mind...is always the backstop, in terms of BoJ," Sim said. Many market participants expect the BoJ to take further easing steps at some point to achieve its 2 percent inflation target, although expectations for the central bank to act soon have faded recently as BoJ Governor Haruhiko Kuroda remains doggedly positive that the economy is improving.
"If the Ukraine situation escalates, and that leads to a global risk-off, and perhaps higher oil prices as well...Japanese policymakers would have to reassess the economic impact on Japan and that may prompt a policy response," he added. The Russian military intervention on the Crimean peninsula has rattled oil markets, with US crude rising to its highest settlement price in 5-1/2 months on Monday.
Trading in the Australian dollar was somewhat choppy after the Reserve Bank of Australia kept interest rates steady at a record low of 2.50 percent, as widely expected, and reiterated that the most prudent course for policy was likely a period of stability. The Aussie dollar rose to around $0.8970 or so right after the RBA decision, but later faltered when the RBA said in its post-meeting statement that the Australian dollar's exchange rate remains high by historical standards. The Australian dollar was last steady on the day at $0.8936, staying above a one-month low of $0.8891 that had been set on Monday.