The Japanese yen climbed against its major counterparts during the European session on Wednesday, as hawkish comments from Fed Chair Jerome Powell stoked concerns about the possibility of a larger rate hike by the central bank later in the month.
Recent strong data suggested that the ultimate level of interest rates would be higher than previously anticipated, Powell told the Senate Banking Committee on Tuesday.
Policymakers are ready to increase the pace of rate hikes depending upon the totality of incoming data, the Fed chief added.
Investors worry that more rate hikes by the Fed to curb sticky inflation could drag the economy into a recession.
According to CME's FedWatch tool, markets now price in an almost 70 percent chance of a 50-basis point rate hike at the Fed's March 21-22 policy meeting.
The yen climbed to 2-day highs of 145.30 against the franc and 144.30 against the euro, from its prior lows of 146.15 and 145.23, respectively. The yen is seen finding resistance around 142.00 against the franc and 141.00 against the euro.
The yen recovered to 83.74 against the kiwi and 137.02 against the greenback, from an early low of 84.28 and near a 3-month low of 137.91, respectively. The currency is poised to find resistance around 82.00 against the kiwi and 133.00 against the greenback.
The yen rose back to 90.33 against the aussie, heading to pierce its previous 1-1/2-month high of 90.16. On the upside, 88.00 is likely seen as the next resistance level.
The yen touched 162.02 against the pound, its strongest level since February 24. The currency is likely to find resistance around the 157.00 level.
The yen strengthened to near a 2-week high of 99.34 against the loonie, off an early 5-day low of 100.17. If the currency rises further, it may face resistance around the 96.00 level.
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