Yen and dollar down as security in focus

The yen and the dollar fell prey to security concerns and sliding stocks on Monday, leaving the euro as the biggest beneficiary in a market short on fundamental economic news to move prices.
In Japan the Nikkei share index slipped 0.88 percent on the day in a broad retreat of Asian stock markets led by Taiwan's near-seven percent tumble on a disputed election victory for President Chen Shui-bian.
News that Israel killed the spiritual leader of the Hamas militant group added to recent security concerns, while Pakistan troops remained locked in battle with a group of suspected al Qaeda fighters
Analysts said these events had little direct impact on dollar sentiment but they drew investor attention to security concerns, which had weighed on the dollar since the deadly Madrid bombs less than two weeks ago.
"We have had the assassination in Israel, political uncertainties in Taiwan and the al Qaeda story - so that could be a nice explanation," said Niels Christensen, currency strategist at Societe Generale in Paris.
"But it's more a few orders going through and pushing through technical levels that then break - and suddenly you have euro/dollar half a big figure higher. This week, from an economic point of view, is not very exciting - we get all the excitement next week in the US and Japan."
The dollar dipped as much as three-quarters of a percent on the day at one point against the euro to $1.2375, after rising to $1.2225 in Asia.
The biggest loser on the day was the yen, which fell more than one percent to 132.40 per euro, compared with last week's seven-week high of 130.73.
It was 0.3 percent down at 107.09 per dollar by 1300 GMT, but still within one yen of last week's one-month high of 106.36 yen.
The safe-haven Swiss franc also gained 0.7 percent on the dollar while sterling was also up 0.7 percent.
US stock futures indicated a weak start on Wall Street.
Little economic data is scheduled for release on Monday but several key monetary policymakers make speeches.
European Central Bank Governing Council member Ernst Welteke said on Monday he believed that liquidity in Europe was adequate for inflation-free growth on the continent.
Federal Reserve Bank of San Francisco President Robert Parry and Chicago Fed President Michael Moskow speak at separate events at 1800 GMT.