The dollar edged higher against the Japanese yen on Friday, as fading concerns about a possible Western military intervention in Syria helped boost risk appetite among investors. The dollar was 0.08 percent higher against the yen. During the session it hit a seven-week high. The weakening of the safe-haven yen suggested investors were less worried after a week dominated by US-China trade tensions and the possibility of a US-led missile strike on Syria.
"It had looked to many investors that world was headed for a trade war and an escalating risk of war in Syria," Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said in a note.
"But now it seems less clear," he said. The prospect of Western military action in Syria hung over the Middle East but there was no clear sign a US-led attack was imminent.
Major stock markets around the world were set to post their biggest weekly gain in over a month. The yen slipped even as S&P Global Ratings revised Japan's outlook to 'positive' from 'stable' on the view that a stronger economy set the stage for fiscal improvement.
The greenback also edged higher against the Swiss franc. The Swiss and Japanese currencies are often sought in times of global tension partly because the countries have big current account surpluses. The dollar index, which measures the greenback against a basket of six major currencies, was little changed at 89.755.
Sterling rose to a 10-week high against the dollar and pulled itself out of a six-month trading range against the euro, prompting investors to unwind long euro positions.
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