TOKYO (REUTERS) - The US dollar dropped to a four-month low against the yen early on Tuesday (Aug 29) after the Japanese and South Korean governments said North Korea had fired a missile that passed over northern Japan.
The dollar was down 0.5 per cent at 108.725 yen after hitting 108.330, its lowest since April 18.
The greenback was already on the defensive, particularly against the euro, after Federal Reserve chair Janet Yellen did not mention monetary policy at a central bankers' summit in Jackson Hole last week, and as European Central Bank president Mario Draghi's held back from talking down the euro at the same meeting.
The yen, seen as a safe haven by investors, rose 0.8 per cent to 108.33 to the dollar, its highest since April, despite Japan's proximity to North Korea.
The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.
The falling US dollar also buoyed other Asian currencies, with the Singapore dollar on Tuesday morning keeping close to the near one-year high it hit on Monday.
At 9:30am, the Singdollar was trading at S$1.3550 to the dollar, near Monday's close of S$1.3545, which was the highest for the local currency since Sept 8 last year. The Singdollar has risen nearly 7 per cent to date this year.
The euro was down 0.1 per cent at US$1.1965 following an ascent to US$1.1986, its highest since January 2015.
With additional information from The Straits Times