2018.06.1903:42:00UTC+00Yen Strengthens Amid Risk Aversion

The Japanese yen gained ground against its major counterparts in the Asian session on Tuesday, as Asian shares fell after U.S. President Donald Trump threatened more tariffs on Chinese goods in an escalating tit-for-tat trade war between the world's two biggest economies.

Trump threatened on Monday to impose new tariffs on $200 billion of Chinese goods, unless China refuses to change its practices.

China responded swiftly, saying "If the US acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures."

China's Commerce Ministry criticized the White House action as blackmail, triggering concerns of a full-blown trade conflict that could derail global growth.

The yen, perceived as a safe-haven asset, is often sought during market turmoil and political tensions.

The yen climbed to an 8-day high of 109.55 against the greenback, after having fallen to 110.57 at 6:15 pm ET. The next likely resistance for the yen is seen around the 108.00 level.

The yen advanced to a 2-1/2-month high of 82.73 against the loonie and near a 3-month high of 80.64 versus the aussie, off its early lows of 83.77 and 82.09, respectively. The yen is seen finding resistance around 81.00 against the loonie and 79.00 versus the aussie.

The yen strengthened to near 3-week highs of 126.80 against the euro, 144.64 against the pound, 110.19 against the franc and 75.54 against the kiwi, from its previous lows of 128.51, 146.47, 111.09 and 76.72, respectively. The next possible resistance for the yen is seen around 125.00 against the euro, 142.00 against the pound, 108.00 against the franc and 74.00 against the kiwi. Looking ahead, Eurozone current account and construction output for April are due in the European session.

At 4:00 am ET, the European Central Bank President Mario Dragi will speak at the ECB Forum on Central Banking in Portugal.

In the New York session, U.S. housing starts and building permits for May are scheduled for release.