* Concerns about possible North Korean test also underpin
* Euro edges back toward 6-month highs touched after
TOKYO May 10 The dollar slid on Wednesday and
the perceived safe-haven yen gained after U.S. President Donald
Trump abruptly fired FBI Director James Comey in a move that
Comey had been leading his agency's investigation into
alleged Russian meddling in the 2016 U.S. presidential campaign
and possible collusion with Trump's campaign. Democrats
immediately accused Trump of acting out of political
Any U.S. political turmoil tends to weigh on the dollar, as
a divided Congress could derail Trump's promised tax reform and
The dollar index, which tracks the greenback against a
basket of six major currencies, slipped 0.2 percent to 99.437
, moving away from a three-week high of 99.688.
The dollar dipped 0.2 percent against its Japanese
counterpart to 113.77 yen, below its overnight high of
114.325, which was its highest since March 15.
Rekindled fears that North Korea could be gearing up for
another weapons test also underpinned the yen.
"In the early morning hours of Asian trade, the yen started
to strengthen, and it could have been the reaction of overseas
markets to a North Korean diplomat's comments," said Mitsuo
Imaizumi, Tokyo-based chief foreign-exchange strategist for
In an interview with Sky News on Tuesday, Pyongyang's
ambassador to the UK, Choe Il, said North Korea is ready to
conduct a sixth nuclear test. Observers of that country have
said such a test was likely, but his comments reminded markets
that tensions could escalate on the recently calm Korean
South Korea's newly elected liberal leader Moon Jae-in, who
will be sworn in on Wednesday, is expected to try to engage
Pyongyang with dialogue and aid, breaking from his predecessor's
"With this in the background, as well as the present
uncertainty in the U.S., the dollar will trade heavily today
below the 114-yen level," Imaizumi said.
Lower U.S. yields also pressured the dollar. The benchmark
10-year U.S. Treasury yield slipped to 2.397 percent
in early Asian trade, down from Tuesday's U.S. close of 2.407
It scaled five-week peaks overnight, as interest rate
futures priced in close to a 90 percent chance that the U.S.
Federal Reserve will raise interest rates again at its next
meeting in June.
The euro added 0.1 percent to $1.0885, edging back
toward six-month highs hit after centrist Emmanuel Macron's
victory in the French presidential election on Sunday.
European Central Bank chief Mario Draghi is scheduled to
speak at the Dutch House of Representatives later on Wednesday.
Investors will be waiting to see if he alters his dovish tone in
light of recent strength in the euro zone economy.
(Reporting by Tokyo markets team; Editing by Richard Pullin)