Yen Higher On US-China Tensions

The Japanese yen strengthened against its major counterparts in the Asian session on Friday amid rising risk aversion, as US-China tensions escalated after China approved a controversial national security law for Hong Kong.

Trump will hold a press conference later today to provide details about response to China over its treatment of Hong Kong.

Investors also turned cautious after a raft of nation's economic data, including weak industrial output and retail sales data for April.

In economic news, Japan's industrial output skidded a seasonally adjusted 9.1 percent in April. That missed expectations for a decline of 5.1 percent following the 3.7 percent drop in March.

The total value of retail sales in Japan was down a seasonally adjusted 9.6 percent on month in April, shy of expectations for a decline of 7.0 percent following the 4.5 percent drop in March.

The unemployment rate in Japan came in at a seasonally adjusted 2.6 percent in April, beneath expectations for 2.7 percent, but up from 2.5 percent in March.

Overall consumer prices in Japan were up 0.4 percent on year in May, exceeding expectations for an increase of 0.2 percent, which would have been unchanged from the April reading. Core CPI, which excludes volatile food costs, gained an annual 0.2 percent versus forecasts for a decline of 0.2 percent after easing 0.1 percent in the previous month.

The yen rose to 132.18 against the pound, 111.19 against the franc and 118.86 against the euro, from its early lows of 132.73, 111.72 and 119.33, respectively. The next possible resistance for the yen is seen around 129.00 against the pound, 107.5 against the franc and 116.5 against the euro.

The yen appreciated to an 11-day high of 107.08 against the greenback, 2-day high of 66.47 against the kiwi and a 3-day high of against the loonie, off its early lows of 107.72, 66.84 and 78.22, respectively. The yen is seen challenging resistance around 104.00 against the greenback, 63.00 against the kiwi and 75.00 against the loonie.

The yen gained to 71.13 against the aussie, after falling to 71.51 earlier in the session. The yen is likely to face resistance around the 68.00 region, if it gains again.

Looking ahead, Swiss KOF leading indicator and Eurozone consumer inflation for May are due in the European session.

Canada GDP data for March, U.S. personal income and spending data for April and University of Michigan's consumer sentiment index for May will be featured in the New York session.