Markets News

FOREX-Brexit confusion rattles FX markets, boosts yen

* Yen, franc gain on renewed Brexit jitters

* Currencies quiet before ECB, Scandinavian central bank meetings

* Sterling below $1.29 after latest parliamentary defeat

* Graphic: World FX rates in 2019

LONDON, Oct 23 (Reuters) - The Japanese yen rose to a one-week high and the Swiss franc gained on Wednesday as investors sought safer assets after British lawmakers forced a delay in the UK government’s Brexit plans.

Foreign exchange markets were generally quiet with Brexit uncertainty hanging over the market and central bank meetings due on Thursday in Sweden, Norway and the euro zone.

On Tuesday, British lawmakers opposed Johnson’s timetable for pushing the Brexit legislation through parliament -- three days.

Johnson now looks set to push for a general election before Christmas to break the impasse. It is up to the EU to decide whether to extend Britain’s Oct. 31 deadline for its departure.

Adam Cole, a strategist at RBC Capital Markets, said Brexit was driving a “general risk-off tone”.

“Things could change very quickly today, depending on the EU response,” he said. He added that he did not see “much downside” risk now that a no-deal Brexit was off the table.

Morten Lund, a senior strategist at Nordea, said that markets were reacting to the likelihood of a UK election.

The Japanese yen rose to 108.25 per dollar, its strongest since Oct. 15, before settling at 108.380, up 0.1% on the day. Versus the Australian dollar, the yen strengthened as much as 0.5%.

The Swiss franc, which investors also tend to buy when they feel nervous, rose 0.1% to 1.1006 francs per euro.

The euro edged lower to $1.1120 before Thursday’s European Central Bank meeting, outgoing president Mario Draghi’s final policy meeting.

The dollar index was flat at 97.547.

Sterling slipped as low as $1.2842 in Asia, then recovered to $1.2877 as London opened. That left the pound more than one cent off Monday’s five-and-a-half-month high.

The Swedish crown was little changed against the euro at 10.737 crowns per euro and the Norwegian crown continued the losses that saw it reach a record low against the euro last week. The euro added 0.3% against the Norwegian currency to 10.2075 crowns.

Australia’s dollar dropped 0.2% to $0.6841 as risk aversion knocked a currency considered a barometer for investors’ moods.

Additional reporting by Stanley White in Tokyo, editing by Larry King