Japanese Yen Higher On Delta Virus Fears

The Japanese yen strengthened against its major rivals in the European session on Tuesday, as concerns about the spread of the Delta variant of the coronavirus across the globe lifted the appeal of the safe-haven assets.

A spike in new infections of the Delta variant in Asia, Europe and the U.S. stocked worries about more shutdowns and other restrictions, which could derail the economic recovery.

With just three days left for Tokyo Games, new coronavirus cases are being found among athletes and non-athletes in the Olympic Village.

U.S. officials warned that local restrictions may have to be re-imposed to curb the outbreak of the Delta variant.

Data from the Ministry of Internal Affairs and Communications showed that Japan overall inflation climbed 0.2 percent on year in June.

That was in line with expectations following the 0.1 percent decline in May.

The yen rose to 109.33 against the greenback and 118.96 against the franc, after falling to 109.75 and 119.48, respectively in early deals. The yen is seen finding resistance around 106.00 against the greenback and 116.5 against the franc.

The yen spiked up to near a 4-month high of 148.94 against the pound, while reaching 128.88 against the euro, which was its strongest level since March 29. If the yen rises further, 145 and 125 are possibly seen as its next resistance levels against the pound and the euro, respectively.

The yen held firm at 85.77 against the loonie and 80.15 against the aussie. The currency is poised to find resistance around 84 against the loonie and 78 against the aussie.

The yen jumped to more than a 5-month high of 75.44 against the kiwi in the Asian session and has stabilized around 75.55. The pair was worth 75.96 at Monday's close.