Australian Dollar Climbs; Yen Drops On Improved Risk Sentiment

The Australian dollar advanced against its major counterparts in the Asian session on Friday, while the Japanese yen fell amid rising risk appetite, as soothing comments from Federal Reserve Chair Jerome Powell helped ease concerns about more aggressive interest rate hikes to contain inflation.

In an interview with Marketplace on Thursday, Powell reiterated that the central bank is prepared to raise interest rates by a half point at the coming meetings in June and July.

The Fed chief stressed that a 75 basis point increase was not on the cards.

Powell acknowledged that the central bank is "prepared to do less," if factors come in better than expected.

The Fed's goal is to get inflation back down to 2 percent without falling into a recession, Powell added.

The aussie gained to 0.6899 against the greenback and 89.09 against the yen, bouncing off from its early lows of 0.6853 and 87.91, respectively. The aussie is poised to find resistance around 0.72 against the greenback and 91.00 against the yen.

Against the loonie and the kiwi, the aussie edged up to 0.8966 and 1.1024, from its previous lows of 0.8937 and 1.0995, respectively. The next possible resistance for the aussie is seen around 0.92 against the loonie and 1.12 against the kiwi.

The aussie climbed to a 2-day high of 1.5068 against the euro, after dropping to 1.5141 at 5:30 pm ET. On the upside, resistance is seen near the 1.46 level.

The Japanese currency weakened to 129.36 against the greenback and 157.94 against the pound, retreating from its prior highs of 128.25 and 156.40, respectively. The yen is likely to challenge support around 132.00 against the greenback and 160.00 against the pound.

After rising to 133.10 against the euro and 127.79 against the franc in early deals, the yen dropped to 134.30 and 128.92, respectively. The yen is seen finding support around 137.00 against the euro and 130.00 against the franc.

The yen slipped to 99.46 against the loonie and 80.85 against the kiwi, following its previous highs of 98.29 and 79.87, respectively. If the yen extends drop, 102.00 and 83.00 are possibly seen as its support levels against the loonie and the kiwi, respectively.

Looking ahead, Eurozone industrial production for March will be out in the European session.

U.S. import and export prices for April and University of Michigan's preliminary consumer sentiment index for May are set for release in the New York session.