* FX markets largely ignore trade war fears
* Australian dollar rises 0.5 percent to $0.7795
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Tom Finn
LONDON, April 13 (Reuters) - The dollar climbed to a six-week high against the yen on Friday as caution over a Western military intervention in Syria abated and investors looked to anticipated strong U.S. corporate earnings.
The weakening of the yen, a perceived safe-haven currency, suggested some risk appetite had returned after a week in which U.S.-China trade tensions and the possibility of a U.S.-led missile strike on Syria roiled financial markets.
The dollar rose 0.3 percent to 107.620 yen on Friday, taking it to its highest since late February. The greenback has gained about 0.3 percent versus the yen this week.
Equities rose as Wall Street gained in anticipation of strong corporate earnings. The S&P 500 has now recouped nearly all its losses from earlier this year.
“It would be naïve in the extreme to suggest that the threat of an escalation of geopolitical factors has passed,” CMC Markets’ Michael Hewson in a note.
“But recent price action might suggest that we could look to head towards the upper end of the trading range in the coming days, particularly if US earnings come in ahead of expectations,” he said.
With few exceptions, currencies have remained quiet in the middle of tensions over trade and signs of slowing growth in Europe.
Volatility has rocked other assets but foreign exchange traders have tended to focus on the slow-moving path toward normalizing monetary policy in the world’s biggest economies rather than react to geopolitics.
An index that tracks currency volatility among developed economies is trading near its lowest level this year.
“With each subsequent Presidential tweet, the bar for what actually constitutes risk-off in global FX and bond markets tends to increase,” said Viraj Patel, FX strategist at ING.
“It’s now at a stage where one of these risks, be it a trade or geopolitical war, needs to escalate materially to influence those asset prices that track fundamentals,” he said.
The dollar index against a basket of six major currencies was a shade higher at 89.778. It rose 0.2 percent the previous day, ending a four-day losing streak.
The Australian dollar, sensitive to shifts in risk sentiment, rose half a percent to $0.7795, a three-week high. The euro traded flat at $1.2328 after losing 0.3 percent the previous day, which ended a four-day winning run.
The common currency has risen 0.4 percent this week, supported by comments from European Central bank officials that reinforced expectations towards monetary policy normalisation.
The Swiss franc, a perceived safe haven currency, was little changed at 0.9534 per dollar after losing 0.5 percent overnight.
The threat of a Sino-U.S. trade war continued to lurk in the background with the Wall Street Journal reporting the White House thought its hard-line stance was working and planned to escalate the pressure on Beijing. (Reporting by Tom Finn Editing by Hugh Lawson)