2014.07.2201:47:10UTC+00Japanese yen drops on moderate reduction in risk aversion

The Japanese yen dipped versus the US dollar and the euro Tuesday as a modest reduction in geopolitically-ignited risk aversion bolstered equities across Asia.

But the markets cannot fully dismiss geopolitical woes as upheaval in Ukraine and Gaza were still high, keeping the dollar and the euro in a close corridor against the yen.

"Geopolitical developments channelled through higher oil prices will remain key theme this week," said Shinichiro Kadota, Chief FX Strategist at Barclays Bank.

Oil prices have climbed as the caution of rising tension between Russia and the West over the crisis in Ukraine built up, with US crude rallying to a three-week high Monday.

The euro inched up 0.1% to ¥137.25 after it crawled back from a five-month trough of ¥136.71 touched last week. The dollar ticked up 0.1% to ¥101.49, receding from a low of ¥101.09 touched late last week.