The Japanese yen climbed against its major counterparts in the New York session on Tuesday amid risk aversion, as investors awaited the Federal Reserve's decision on interest rates and digested warning on the nation's debt ceiling impasse.
The Fed's interest rate decision is due tomorrow, with the central bank expected to deliver another rate hike of 25 basis points.
Traders will pay close attention to the accompanying statement for clues about the outlook for rates.
CME Group's FedWatch Tool is currently indicating an 87.5 percent chance the Fed will raise rates by 25 basis points and a 72.9 percent chance the central bank will subsequently leave rates unchanged in June.
Concerns about lawmakers' struggles to reach an agreement on raising the U.S. debt ceiling are also weighing on risk sentiment.
The yen advanced to 84.57 against the kiwi and 90.85 against the aussie, from its early 4-1/2-month low of 85.41 and a 2-1/2-month low of 92.43, respectively. The yen may find resistance around 80.00 against the kiwi and 87.00 against the aussie.
The yen climbed to 152.61 against the franc and 136.38 against the greenback, off its early multi-year low of 153.96 and near a 2-month low of 137.77, respectively. The currency is seen finding resistance around 144.00 against the franc and 132.00 against the greenback.
The yen appreciated to 4-day highs of 149.82 against the euro and 169.95 against the pound, up from its prior multi-year lows of 151.61 and 172.32, respectively. Next immediate resistance for the currency is seen around 145.00 against the euro and 165.00 against the pound.
The yen rose to a 4-day high of 100.06 against the loonie, reversing from an early fresh 5-month low of 101.80. On the upside, 97.00 is likely seen as its next resistance level.
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