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Yen Slides Amid Risk Appetite

The Japanese yen drifted lower against its most major counterparts in the European session on Tuesday amid improved risk appetite, after the U.S. retail sales report for January showed a rebound and as U.K. Prime Minister Theresa May obtained some last minute changes to the divorce agreement from the European Union.

May claimed that the new documents to be added to the Brexit deal would provide additional legal guarantees that the UK can't be retained indefinitely inside the backstop arrangement.

The changes eased concerns over the possibility of U.K. leaving the European Union without a deal.

The British Parliament is due to hold a series of votes on Brexit starting today, after having voted down original withdrawal deal in January.

The U.S. economic calendar remains light, with investors awaiting the Labor Department's closely-watched report on consumer price inflation for February.

The yen dropped to a 4-day low of 111.47 against the greenback, 6-day low of 78.87 against the aussie and a weekly low of 76.29 versus the kiwi, from its early highs of 111.16, 78.55 and 75.93, respectively. If the yen falls further, 113.00, 80.00 and 78.00 are likely seen as its next support levels against the greenback, the aussie and the kiwi, respectively.

Reversing from its early highs of 124.98 against the euro and 109.98 against the franc, the yen fell to 5-day lows of 125.77 and 110.58, respectively. The yen is poised to find support around 128.00 against the euro and 112.00 against the franc.

On the flip side, the yen climbed to 145.13 against the pound, from a 1-week low of 147.79 hit at 6:00 pm ET. The next key resistance for the yen is seen around the 142.00 region.

The yen edged up to 82.93 against the loonie, off its early 5-day low of 83.19. The yen is likely to find resistance around the 81.00 area.

Looking ahead, U.S. CPI for February is scheduled for release in the New York session.

At 9:45 am ET, Federal Reserve Governor Lael Brainard will give a speech on "Community Reinvestment Act Modernization" at the National Community Reinvestment Coalition's Just Economy Conference in Washington DC.

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