Yen Appreciates On Uncertainty Over Additional Stimulus Payments

The Japanese yen gained ground against its major counterparts during the European session on Wednesday, as receding hopes of an enhanced U.S. relief payments raised the appeal of safe-haven assets.

Senate Majority Leader Mitch McConnell on Tuesday blocked Democrats' attempt to immediately pass a bill that would grant $2000 in direct payments to qualified Americans.

He said that senators will address the measure this week, but the outcome is uncertain.

The U.S. state of Colorado reported the first case of the coronavirus variant that was discovered in the U.K. Health officials said that the person has no recent travel history and they are monitoring the situation very closely.

In Japan, an earthquake of magnitude 5.1 hit Ibaraki Prefecture at 9.35 a.m. local time.

No major damage or injuries has been reported following the incident.

The yen climbed to 103.13 against the greenback, its biggest level since December 18. If the yen rises further, 100.00 is seen as its next resistance level.

The yen spiked up to 2-day highs of 80.61 versus the loonie and 126.54 versus the euro, off its early lows of 80.86 and 127.14, respectively. The next possible resistance for the yen is seen around 78.00 versus the loonie and 122.00 versus the euro.

The yen reversed from an early low of 117.25 versus the franc and was trading higher at 116.63. On the upside, 112.5 is possibly seen as its next resistance level.

The yen recovered slightly to 78.94 against the aussie and 74.11 against the kiwi, from its previous 1-1/2-year lows of 79.17 and 74.28, respectively. The yen is seen finding resistance around 77 against the aussie and 73.00 against the kiwi.

In contrast, the yen fell to a 2-day low of 140.22 against the pound from Tuesday's close of 139.81. The yen is poised to find support around the 142.5 region.

Data from the Nationwide Building Society showed that UK house prices grew at the fastest pace in six years in December as the property market remained resilient despite the pandemic.

House prices climbed 7.3 percent year-on-year in December, following November's 6.5 percent increase. Prices were expected to rise 6.7 percent.

Looking ahead, U.S. pending home sales, wholesale inventories and advance goods trade balance for November will be published in the New York session.