By Alun John

HONG KONG (Reuters] – On Friday, the safe-haven yen gained on the dollar as the U.S. president Joe Biden stated that Moscow has prepared a pretext to attack Ukraine. Also supporting the Swiss franc, and hurting Bitcoin.

In early Asia trade the dollar fell to an all-time low of 114.78yen, a two-week high. It is currently down 0.5% this week.

CBA analysts stated that today’s support level of 114.63 is within reach if there are more negative headlines regarding Ukraine. They also noted that markets were still focused on Bank of Japan policy as the central bank maintains its control over the yield curve.

The Western fear of a Russian invasion has been renewed by the early morning firefights between pro-Russian separatists and Kyiv’s forces on Thursday. These two groups have been fighting for many years.

U.S. President Joe Biden stated that Moscow has prepared a pretext for an attack, and the Kremlin expulsed an American diplomat.

These tensions caused the dollar’s loss of ground against the Swiss franc. The greenback ended last Thursday at 0.9196 Francs. That is just above the low on Thursday’s intraday, 0.9186 francs.

Bitcoin was at the opposite end of risk, trading at $40,500. It had fallen 7.6% in the last 24 hours, and that’s around its two-week low.

Chris Weston of Pepperstone’s Melbourne-based research department stated in an email that Crypto “has shown us again that it is high beta risk and that it could potentially become something very ugly.”

After a week of volatile trading on Ukraine headlines, the euro was back at $1.1360. The pound was stable at 1.3609 thanks to markets that bet on further monetary tightening by the Bank of England.

The yen was affected by central bank policy, which came after the BOJ offered unlimited benchmark 10-year government bonds for its determination to limit domestic borrowing costs.

The BOJ’s target yield of 0.25% on these bonds has not been aggressively tested by the markets, however yields on other Tenors are rising. [JP/T]

In the meantime, the Federal Reserve continues to debate aggressively how it should increase interest rates. It is currently debating whether it should start with a 25- or 50-basis point rise at its March meeting.

Loretta Mester, President of the Cleveland Fed, stated late Thursday that the Fed will need to increase interest rates faster and reduce its balance sheet quicker than after the “great recession”.