NEW YORK: The dollar was little changed on Wednesday after falling to a nearly five-month low against the Japanese yen as worries over geopolitical tensions checked investors' risk appetite.
The flight to safety underpinned traditional safe havens like the yen, US Treasuries and gold amid new concerns about France's presidential election and the United States' relations with Syria and North Korea.
The yen gained more than 1 percent on Tuesday, its biggest one-day rise in three months against the dollar, with the greenback falling below 110 yen for the first time since mid-November. On Wednesday, the dollar touched its lowest against the yen since Nov. 17.
The yen also reached its highest against the euro since mid-November and against sterling since January.
Trading was largely muted on Wednesday as safe-haven demand kept US Treasury yields lower and investors saw little reason to make major moves in the currency market.
"The dollar is still looking a little soft as it has over the past few days, and a lot of it's on the back of US yields (falling)," said Dave Bradley, director of FX trading at Scotia Capital in Toronto.
Yields on the benchmark US 10-year note have dipped to near three-month lows this week as safe-haven demand tied to geopolitical worries has boosted buying.
The dollar index, which measures the greenback against six major currencies, fell to 100.55, its lowest in five days.
"Risk sentiment is not strong at the moment because of tensions in North Korea and also risk of a recent rising (far-left French presidential candidate Jean-Luc) Melenchon," said Nomura currency strategist Yujiro Goto in London. "Those are having a negative impact on risk sentiment and also dollar-yen."
However, the dollar did get support from a rise in oil prices, Goto added. "I think that's generally good for risk sentiment and negative for the yen."
Brent oil extended gains into an eighth straight session on Wednesday after Saudi Arabia was said to be pushing fellow members of Organization of the Petroleum Exporting Countries and some rivals to prolong supply cuts beyond June.
The pound was the largest gainer against the dollar among major currencies on Wednesday, adding 0.25 percent after data showed stronger-than-expected UK wage growth. Sterling also rose modestly against the euro.
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