* Trump national security aide Flynn resigns over Russian
* Yellen to testify to Congress on Tuesday, Wednesday
* Dollar edges down vs yen but well above last week's lows
* French election concerns continue to plague euro
TOKYO, Feb 14 The dollar extended losses on
Tuesday after President Donald Trump's national security adviser
Michael Flynn quit, with investors waiting to see whether
Federal Reserve Chair Janet Yellen offers clues to the likely
pace interest rate increases in her congressional testimony.
The dollar weakened 0.3 percent on the day to stand at
113.43 yen, off Monday's high of 114.17 but well above a
10-week low of 111.59 yen touched a week ago.
It touched its session low of 113.39 yen shortly after news
that Flynn resigned late on Monday under scrutiny over whether
he discussed the possibility of lifting U.S. sanctions on Russia
before Trump took office.
"The news weighed on the dollar against the yen because it's
a hard situation to understand, and also to understand what kind
of broader fallout it will have," said Kumiko Ishikawa, FX
market analyst at Sony Financial Holdings.
Slumping Japanese equities also put upward pressure on the
yen. The Nikkei stock average was down 0.7 percent,
extending losses in afternoon trading after Toshiba Corp
unexpectedly delayed the release of its quarterly
earnings and details of a multi-billion dollar writedown to its
The dollar index was down 0.1 percent on the day at 100.84
, edging away from Monday's high of 101.11, its highest
level since Jan. 20.
Yellen will present the U.S. central bank's semi-annual
report on monetary policy and the economy in testimony to the
Senate Banking Committee on Tuesday, followed by a the
semi-annual monetary testimony before the House Financial
Committee on Wednesday.
"People are just waiting for Yellen's testimony, and
depending on what she says, the dollar could test the upside
again," said Kaneo Ogino, director at foreign exchange research
firm Global-info Co in Tokyo.
"But a few Japanese exporters are selling dollars at the
moment, disappointed that it didn't go even higher after the
weekend meeting" of U.S. President Donald Trump and Japanese
Prime Minister Shinzo Abe, who apparently did not discuss
currency policy or trade protectionism, Ogino said.
Abe said on Tuesday he agreed with Trump that currency
issues should be left for the finance leaders of each country to
Dallas Federal Reserve Bank President Robert Kaplan, a voter
this year on the Fed's policy-setting panel, said on Monday in
remarks prepared for posting to the Dallas Fed website that the
U.S. central bank should act soon to raise rates or risk having
to abandon its plan to do so slowly.
"Yellen does not need to say anything in detail. I think
she'll be very cautious, so currencies might not move so much,"
said Masashi Murata, senior strategist at Brown Brothers
"She might suggest some possibility of the Fed hiking rates
in March, but I think that risk is very small," he added.
Interest rates futures showed investors pricing in only
about a 1 in 5 chance the Fed will increase rates at its meeting
next month, according to CME Group's FedWatch program.
The dollar also got a lift from Trump's promise last week of
a "phenomenal" tax plan that the White House said would include
tax cuts for businesses and individuals. The hopes raised by his
comments helped lift U.S. stocks to record highs on Monday.
The euro, which has come under pressure in recent sessions
as France's election campaign has heated up, was up 0.1 percent
French presidential frontrunner Emmanuel Macron is being
targeted by Russian media and internet attacks from within
Russia with the goal of helping the election campaigns of his
pro-Moscow rivals, his party chief said on Monday.
(Reporting by Tokyo markets team; Editing by Simon