The U.S. dollar was bound in a tight range just above 102 yen in tepid trading in Tokyo on Monday as ongoing geopolitical tensions kept risk sentiment in check, sapping demand for the U.S. currency.
At 5 p.m., the dollar fetched 102.09-11 yen compared with 101.99-102.09 yen in New York and 101.69-70 yen in Tokyo at 5 p.m. Friday. It moved between 102.02 yen and 102.20 yen during the day, changing hands most frequently at 102.13 yen.
The euro was quoted at $1.3396-3397 and 136.76-80 yen against $1.3403-3413 and 136.78-88 yen in New York and $1.3380-3381 and 136.06-10 yen in Tokyo late Friday afternoon.
The dollar moved little in Tokyo, having inched up out of the upper 101 yen zone as weekend developments saw a slight resurgence of the risk sentiment depressed by the Ukraine crisis and conflict in northern Iraq, said Toshiyuki Suzuki, senior market economist at the Bank of Tokyo-Mitsubishi UFJ.
Tensions over the Ukraine crisis ebbed as Russian troops were reported to have pulled back from positions near the country's border with Ukraine, while Israel and Palestinian authorities agreed early Monday to a further 72-hour cease-fire in Gaza.
"Risk appetite rebounded a little with these developments, but these conflicts in Ukraine and the Middle East aren't going away any time soon, so the mood is still risk-off," Suzuki said.
The next few weeks are likely to be devoid of central bank policy announcements as well as data with a potential for surprises, making traders hesitant to make bold moves regardless of geopolitical developments, Suzuki added.
Japan's April-June gross domestic product data, due Wednesday, may yet influence the dollar-yen pair, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.
"The GDP is expected to show the economy took a hit from the (April 1) consumption tax hike, but if it's especially gloomy expectations will rise that the Bank of Japan will further loosen monetary policy, putting downward pressure on the yen," Sakai said.
The euro held firm against the dollar and yen in Tokyo after gaining a little ground on Friday, capped by the specter of the Ukraine crisis' effect on the eurozone economy, Sakai said.
"The euro strengthened slightly on position adjustment ahead of the weekend, but looking deeper there isn't any compelling reason to buy the euro now, and I don't think it has quite hit bottom yet."
The week brings Germany's July consumer prices on Wednesday and April-June GDP on Friday, but there is no guarantee the euro will be bought even in the face of upbeat data, Sakai said.