By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- The Japanese yen strengthened on Monday as geopolitical jitters in Ukraine and the Gaza Strip lured investors into more safe-haven currencies.

The yen (USDJPY) appreciated against most major currencies, with the dollar buying Yen101.30, down from Yen101.36 late Friday. The euro (EURJPY) also slipped against the Japanese currency, trading at Yen137.03 from Yen137.12.

The moves into currencies traditionally considered safe havens came as fighting continued in Gaza, with 96 Palestinians and 13 Israeli soldiers killed on Sunday.

Tensions also remained high between Ukraine and Russia after Malaysia Airlinesflight MH17 on Thursday was shot down over eastern Ukraine, killing all 298 people on board. No one has claimed responsibility for the incident, but U.S. officials over the weekend leveled allegations at Russia of involvement in the crash.

Meanwhile, in Ukraine on Monday, government forces tried to retake the rebel-held city of Donetsk and fighting raged near the city's railway station, according to media reports.

Simon Smith, chief economist at FxPro, said in a note that the crisis in Ukraine is the main point of focus for currency markets at the start of the week, but that for now "it seems that FX is treating this as a more isolated incident with limited global implications."

"But there is nothing to say that this may change should more sanctions against Russia be announced this week," he said.

The ruble (USDRUB) rose against the dollar and the greenback bought 35.133 rubles, down 0.1% according to FactSet.

In other currency crosses, the euro (EURUSD) fell against the dollar to $1.3523 from $1.3529 on Friday. The pound (GBPUSD) also declined, trading at $1.7075, down from $1.7090.

The ICE dollar index (DXY) inched up to 80.564 from 80.5260, while the WSJ Dollar Index advanced to 73.09 from 73.06 on Friday.

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(END) Dow Jones Newswires

July 21, 2014 05:41 ET (09:41 GMT)

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