* Swiss franc eases, but clings to Wednesday’s hefty gains
* Dollar near 110 yen, up from Wednesday’s near 8-week low
* Kiwi tumbles after RBNZ says would like lower NZ$ (Updates prices, adds comments)
By Masayuki Kitano
SINGAPORE, Aug 10 (Reuters) - The Swiss franc caught its breath against the dollar on Thursday after a sharp rally the previous session, but still held on to much of those hefty gains amid deepening anxiety over the war of words between the United States and North Korea.
The Swiss franc eased about 0.2 percent to 0.9658 per dollar , having surged roughly 1.1 percent on Wednesday.
Against the euro, the Swiss currency was little changed at 1.1328 per euro. It had risen more than 1 percent on Wednesday, one of its largest single-day jumps against the euro since the Swiss National Bank removed its cap on the currency in January 2015.
The Swiss franc had rallied after U.S. President Donald Trump warned North Korea earlier this week that it would face “fire and fury” if it threatened the United States. That prompted North Korea to say it was considering firing missiles at Guam, a U.S.-held Pacific island.
The ominous exchange of words between Washington and Pyongyang kept investors on edge.
“Right now people are still watching quite nervously,” said Sim Moh Siong, FX strategist for Bank of Singapore. “It’s difficult to tell whether this could trigger a stronger bout of risk aversion.”
The yen held steady against the dollar, taking a breather after having risen on Wednesday to its highest level in nearly eight weeks.
The Swiss franc and Japanese yen are often sought in times of geopolitical tension or global financial stress, partly because both countries have big current account surpluses.
Japan is the world’s biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.
The dollar held steady at 110.02 yen, having pulled up from Wednesday’s low of 109.56 yen, its lowest level since June 15.
Concerns over geopolitical risks probably led investors to pare back bearish bets against the yen and the Swiss franc, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, referring to the gains in those currencies on Wednesday.
“It looks like it was used as a good excuse to adjust positions,” he said, referring to the latest flare-up of tensions between the United States and North Korea.
On Thursday, North Korea’s state media kept up its anti-U.S. rhetoric, saying the nation will develop a plan by mid-August to launch intermediate-range missiles at Guam.
Against the tense backdrop, the South Korean won extended its losses on Thursday and touched its lowest level against the dollar in about a month.
Elsewhere, the New Zealand dollar slid 0.9 percent to $0.7273.
The kiwi came under pressure after the Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler said he would like to see the New Zealand dollar fall and noted the central bank had the capability to intervene.
The kiwi had jumped briefly to levels above $0.7370 in early Asian trade on Thursday, after the RBNZ said it still expected inflation to rise gradually as capacity pressures increase, dousing some expectations it would strike a more dovish tone given recent soft economic data.
The RBNZ kept interest rates unchanged at a record low of 1.75 percent on Thursday. (Reporting by Masayuki Kitano; Editing by Eric Meijer)