2017.07.0403:53:00UTC+00U.S. Dollar, Yen Advance Amid Rising Risk Aversion

The U.S. dollar and Japanese yen climbed against their major counterparts in the Asian session on Tuesday amid rising risk aversion, with investors cautious after North Korea's ballistic missile launch in Japanese waters, ignoring warning from international community to cut off its nuclear weapons program.

The missile launch comes on the eve of Independence Day in the U.S. and also just days before a summit of the Group of 20 countries in Germany later this week.

Japanese Prime Minister Shinzo Abe strongly condemned Pyongyang's firing of ballistic missile and vowed to work closely with the United States and South Korea, while calling on China and Russia to do more.

Oil prices snapped an eight-day winning streak amid reports of increased oil supply from OPEC in June, as nations such as Libya and Nigeria which are exempted from cuts boosted supply.

Traders focus on this week's G20 summit, the Wednesday release of Fed minutes and the U.S. nonfarm payrolls report for more direction.

The dollar was higher on Monday, after release of the better than expected ISM manufacturing report for June. Meanwhile, the yen weakened on improved risk sentiment after upbeat manufacturing data from China and Eurozone.

The greenback that closed yesterday's deals at 1.2939 against the pound, 0.9636 against the Swiss franc and 1.1363 against the euro advanced to a 5-day high of 1.2923, weekly high of 0.9649 and a 6-day high of 1.1336, respectively. The next possible resistance for the greenback is seen around 1.27 against the pound, 0.99 against the franc and 1.11 against the euro.

Reversing from an early low of 0.7682 against the aussie, the greenback climbed to a 6-day high of 0.7605. If the greenback extends rise, 0.75 is possibly seen as its next resistance level.

The greenback bounced off to 1.3008 against the loonie, and is on track to pierce its early 5-day high of 1.3014. Next likely resistance for the greenback is seen around the 1.32 region.

The yen rose to a 4-day high of 82.05 against the NZ dollar, from an early low of 82.75. Further uptrend may take the yen to a resistance around the 80.00 area.

The yen advanced to 145.98 against the pound, 112.74 versus the greenback and 117.06 versus the franc, from early lows of 146.83, 113.44 and 117.74, respectively. On the upside, 143.00, 111.00 and 115.00 are likely seen as the next resistance levels for the yen against the pound, the greenback and the franc, respectively.

The yen edged up to 128.04 against the euro and 86.79 versus the loonie, from an early 1-1/2-year low of 128.97 and nearly a 5-month low of 87.29, respectively. If the yen extends its uptrend, it is likely to find resistance around 125.00 against the euro and 84.00 against the loonie. Looking ahead, U.K. construction PMI for June and Eurozone PPI for May are due to be released later in the day.

In the New York session, Canada Markit's manufacturing PMI for June is slated for release.

U.S. banks will be closed in observance of Independence Day holiday.