Yen steadies in London

The yen steadied around a four-month high versus the dollar on Wednesday, but Japan's nuclear crisis could trigger more yen demand versus higher risk currencies, raising the prospect of intervention to stem gains. The dollar traded at 80.70 yen, just above a four-month low of 80.60 yen hit on Monday.
Higher risk aversion could push up the yen, on speculation Japanese financial institutions will repatriate funds to Japan and on renewed selling of higher risk currencies, although the dollar's record low of 79.75 yen looms. Since a massive earthquake and tsunami hit Japan on Friday, the yen has risen, partly on market speculation that Japanese insurers and companies may repatriate funds to help pay claims and reconstruction costs.
The Australian dollar rose 0.2 percent, clawing back ground after it hit a four-month low on Tuesday. Higher-yielding currencies like the Aussie are seen as proxies for global growth, and are often sold in times of uncertainty. Other "safe-haven" currencies including the dollar and the Swiss franc were supported by ongoing uncertainty about the aftermath of Japan's earthquake and political turmoil in the Middle East and North Africa. The dollar index rose 0.3 percent, while the Swiss franc traded at 0.9166 francs per dollar, hovering in range of an all-time high hit on Tuesday.
The euro slipped 0.5 percent to $1.3925, having failed to break above a four-month high of $1.4036 hit earlier this month. Market participants said offers to sell the euro lay above $1.40, keeping downward pressure on the single currency. European Central Bank Governing Council member Christian Noyer on Wednesday said the central bank would weigh the impact of Japan's crisis on policy decisions, clouding some speculation the ECB will raise interest rates next month, a factor which has been supporting the euro. The head of the eurozone debt rescue fund said it was impossible to say if Greece would have to restructure its debts, which, along with a Moody's downgrade of Portugal's sovereign rating kept investors negative on the euro.