* Euro jumps as high as $1.0940 in early Asian trade
* Centrist Macron wins first round of French election
* DXY skids, but losses mitigated as safe-haven yen slips
* Investors warily monitor N. Korea tensions
TOKYO, April 24 The euro pared gains after
scaling a five-month high against the dollar on Monday after the
centrist candidate won the first round of the French
presidential election, reducing the risk of an
anti-establishment shock in the final round.
The euro was up 1.1 percent at $1.0844 by midday in
Asia after earlier rising as high as $1.0940, its highest since
Centrist Emmanuel Macron, a pro-EU ex-banker and former
economy minister, emerged as the leader of the first round of
voting and qualified for a May 7 runoff alongside the
second-place finisher, far-right leader Marine Le Pen.
His victory makes him the frontrunner in next month's
election, and marked a huge defeat for the two centre-right and
centre-left groupings that have dominated French politics for 60
Against the yen, the euro jumped 2.1 percent to 119.34
, after touching a one-month high of 120.935.
Short-covering on election relief lifted the single currency
and triggered stop-loss orders, market participants said, though
the dust settled as the euro came off its early highs.
"We saw the big moves in the early trading hours when
liquidity was thin, so we might not see anything dramatic for
the rest of the Asian session," said Mitsuo Imaizumi,
Tokyo-based chief foreign-exchange strategist for Daiwa
As the market braced for the election, net short positioning
on the euro in the week ended April 18 increased to its largest
since mid-March, according to calculations by Reuters and
Commodity Futures Trading Commission data on Friday.
The euro's gains dented the dollar index, which tracks the
U.S. currency against a basket of six rivals.
It slumped 0.8 percent to 99.179, though its losses
were mitigated as the greenback gained against the perceived
The dollar was up 0.8 percent at 110.03 yen, rising
above the 110-yen level for the first time in nearly two weeks
and logging an earlier high of 110.64.
Also underpinning the dollar, the benchmark 10-year U.S.
Treasury yield rose to 2.308 percent in Asian trade,
up from Friday's U.S. close of 2.236 percent.
The French vote and the euro's rise come ahead of a European
Central Bank policy meeting on Thursday, at which the central
bank's ultra-easy stance is set to remain unchanged.
But with the first round of France's election out of the
way, the focus of yen traders is once again turning to rising
tension on the Korean peninsula, any flare-up of which could
once again spark safety bids.
"It seems like the market's more concentrated on the Korea
situation again," said Bart Wakabayashi, branch manager for
State Street Bank and Trust in Tokyo.
"Should the yen be bought, if the Korean situation is so
nearby? But buying the yen seems to be the established market
reaction, and if you've been around long enough, you know you
don't go against the market," he said.
South Korea said on Monday it was in talks about holding
joint drills with a U.S. aircraft carrier strike group, as U.S.
President Donald Trump called the leaders of Japan and China
amid fears Pyongyang could conduct another nuclear test.
North Korea said on Sunday it was ready to sink a U.S.
aircraft carrier to demonstrate its military might.
The market largely shrugged off Trump's promise on Friday
that a "big announcement" was coming this week on overhauling
the U.S. tax code. An administration official said on Saturday
that the announcement will consist of "broad principles and
Trump will sign several executive orders on energy and the
environment this week, which would make it easier for the United
States to develop energy on and offshore, a White House official
said on Sunday.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam
and Kim Coghill)