FOREX -Syria tensions buoy yen, Swiss franc while riskier currencies fall
* Yen sharply higher vs Australian and New Zealand dollars Swiss also franc rises versus euro, dollar
* Emerging market currencies in rout on Syria tension
* German IFO survey has little impact on euro/dollar
LONDON, Aug 27 (Reuters) - The safe-haven yen and Swiss franc gained on Tuesday and riskier currencies like the Australian dollar fell as geopolitical tensions rose with the West appearing to edge towards military action against the Syrian government. The dollar extended losses to fall 0.8 percent versus the yen to 98.70 yen, pulling away from a near three-week high of 99.15 yen set on Friday on EBS. The dollar fell 0.2 percent against Swiss franc to 0.9215 francs, while the euro was down 0.4 percent at 1.2296 francs. German, U.S. and British government bond prices all rose as money flowed in to safe-haven markets. On the other hand, stocks were lower as were emerging market assets. "We are seeing some safe-haven bids because of the Syrian issue and that is driving the Aussie and the kiwi lower," said Daragh Maher, currency strategist at HSBC. The growth-linked Australian dollar was down 0.9 percent at $0.8950 while against the yen it lost 1.7 percent to 87.45 yen. The New Zealand dollar fell 1.6 percent against the yen to 76.05 yen Washington said on Monday it believed Syrian President Bashar al-Assad was responsible for a chemical weapons attack on civilians last week in what U.S. Secretary of State John Kerry called a "moral obscenity." The Swiss franc and the yen usually climb in times of financial market stress and economic uncertainty while growth-linked higher-yielding currencies are sold off. Emerging market currencies tumbled, with the Indian rupee hitting a record low and the Russian rouble, the Indonesian rupiah and a host of others recording multi-year troughs. The rising tension stemming from Syria overshadowed the impact from positive data from the euro zone on the euro. The IFO German confidence survey showed business sentiment was at its highest level in 16 months but that had only a fleeting impact on the euro. "IFO beat expectations with both the current assessment and forward-looking expectations better than expected," said Elsa Lignos, senior currency strategist at RBC Capital." The effect was lost in the general safe haven rally, taking euro/dollar down to a low of $1.3322." The euro was last down 0.2 against the dollar at $1.3340 while it was down 1 percent against the yen at 130.31 yen. Its losses against the yen were mainly due to worries about Syria, traders said. Data due later from the United States includes the Case-Shiller house price index, consumer confidence and the Richmond Fed survey. Disappointing U.S. data in the past two trading sessions, including one which highlighted the fragility of the housing sector, have weighed on the dollar, although buying at lower levels has checked sharp losses.