* Leveraged bets against franc unwound in broad risk off
* Dollar/yen hits lowest level since mid-June
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
LONDON, Aug 9 (Reuters) - The Swiss franc jumped on Wednesday and higher yielding currencies such as the Australian dollar tumbled as the latest bout of geopolitical tensions emerging from the Korean Peninsula prompted investors to cut positions.
"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions," said Viraj Patel, an FX strategist at ING in London.
The Swiss franc, a barometer of risk sentiment, surged 0.6 percent to 0.9688 francs against the U.S. dollar, reversing a two-week losing streak.
The franc's surge which was the biggest in two weeks is likely to flush out some leveraged bets as some hedge funds had used the lower yielding franc as a borrowing currency to invest in other such as euro assets in the last three weeks.
North Korea said on Wednesday it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat it presented to the United States would be met with "fire and fury"
Risk off sentiment was broadly pervasive through the currency markets especially with European stocks set to follow Asia's lead lower with major index futures indicating a 0.5 to 0.8 percent decline.
The dollar weakened against the yen, which is often sought in times of geopolitical tension. The U.S. currency was down 0.3 percent at 109.94 yen, following a retreat to 109.740, its weakest since June 15.
"Dollar/yen has already gone below 110.00 yen, and at this stage we are likely to see the pair begin to bottom out as the market finds time to assess the situation," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
The Australian dollar, which rose to a 19-month high near 90.00 yen late in July, was down 0.6 percent at 86.77 yen after slipping to a one-month low of 86.23 yen.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.bi z / c m s / ? p a g e I d = l i v e m a r k e t s (Reporting by Saikat Chatterjee; Additional reporting by Helen Reid and Shinichi Saoshiro in TOKYO; Editing by Matthew Mpoke Bigg)