* Yen near 7-week low vs dollar, multi-year low against EUR, GBP
* Obama speech reinforces hopes US military strike against Syria may be averted
* Solid Chinese data raises hopes of recovery in China
By Hideyuki Sano
TOKYO, Sept 11 (Reuters) - The yen hit a seven-week low against the dollar and stood near multi-year lows against the euro and sterling on Wednesday, as risk-aversion eased on signs the United States is moving away from taking military action against Syria following a diplomatic initiative from Russia.
Also helping risk currencies against the yen, which had seen some safe-haven buying in recent weeks, was a string of solid data out of China, including stronger-than-expected industrial output that reinforced signs that China’s economy was stabilizing after slowing for more than two years.
U.S. President Barack Obama said late on Tuesday the Russian offer to push Syrian President Bashar al-Assad to put chemical weapons under international control opened up the possibility of heading off the type of limited military strike he was considering against Syria.
While Obama did voice scepticism on the proposal from Moscow, he also said he has asked the U.S. Senate to put off a vote on his request for an authorization of military force to let the diplomacy play out, sparking fresh yen-selling.
“The American public is hardly enthusiastic about a military action and it looks as if Obama was looking for an excuse not to attack Syria,” said Minori Uchida, chief FX strategist at the Bank of Tokyo-Mitsubishi UFJ.
“If the Syrian situation becomes clearer, the dollar/yen could gain further,” he added.
The dollar rose to as high as 100.55 yen and last traded at 100.38 yen, flat on the day but retaining its uptrend of the past several weeks.
“Possible easing in tensions over Syria could even strengthen conviction in markets that the Federal Reserve will taper its stimulus. I expect the dollar to stay above 100 yen as the market prices in the Fed’s tapering,” said a trader at a Japanese bank.
Although the U.S. jobs report last Friday fell short of market expectations, many investors still expect the Fed to start reducing its bond-buying programme at next week’s policy meeting, underpinning the dollar.
The Japanese currency also hit a four-year low against sterling and edged near a three-year trough against the euro.
The euro briefly rose to 133.375 yen, within sight of a three-year high of 133.82 yen hit in May, and last stood at 133.27 yen.
The pound has handily exceeded its May peak to hit a four-year high of 158.12 yen and last traded at 157.93 yen.
The euro held firm against the dollar, fetching $1.3265 , having gained for three consecutive days after hitting a seven-week low of $1.31045 late Friday.
The pound fared even better, thanks to recent signs of a recovery in the UK economy, closing in on its June 17 peak of $1.5753. It last stood at $1.5730.
Also whetting investors’ risk appetite was a string of solid data out of China.
Data published in the last few days, including trade, inflation and industrial production, suggested the world’s second largest economy may have arrested the recent slowdown.
“People have pretty low expectations on China now. But if the Chinese economy is getting better, that’s a good thing for the whole global economy,” said Sho Aoyama, senior market analyst at Mizuho Securities.
Signs of recovery in China, Australia’s major export market, have helped to boost the Aussie to a seven-week high of $0.9320, though that level proved to be a strong resistance point. It last traded at $0.9290, down slightly from late U.S. levels.