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Yen Higher Amid Risk Aversion

The Japanese yen strengthened against its most major counterparts in the European session on Monday amid risk aversion, as the rapid spread of the coronavirus forced governments worldwide to lock down their cities and U.S. massive stimulus plan was deadlocked in the Senate.

More countries and regions are resorting to shutdowns and border closures to prevent the spread of COVID-19, raising concerns about the likely economic impact of the pandemic.

Rise in novel coronavirus cases in the United States and Europe fueled worries about a deep global recession.

Senate Democrats late Sunday blocked the passage of a third economic stimulus package to combat the impact of coronavirus.

That sparked fresh uncertainty over the bill intended to help Americans and the American economy weather the pandemic.

With the number of confirmed cases in the U.S. surpassing 32,000 on Sunday, it's unclear whether the virus will cause a short economic hit or a "prolonged, full-blown recession.

The yen climbed to a 4-day high of 117.72 against the euro and a 5-day high of 111.51 against the franc, from its early lows of 118.60 and 112.55, respectively. The next possible resistance for the yen is seen around 114.00 against the euro and 110.00 against the franc.

The yen appreciated to 127.75 against the pound, from a low of 129.41 set at 5:15 pm ET. The yen is poised to test resistance around the 123.00 mark.

The yen held steady against the aussie, the kiwi and the loonie, after rising to 62.91, 4-day highs of 61.78 and 75.98, respectively in the previous session. The yen had ended Friday's deals at 64.26 against the aussie, 63.26 versus the kiwi and 77.28 versus the loonie.

After climbing to 109.67 in the Asian session, the yen eased off slightly to 110.80 against the greenback. Should the yen continues its downtrend, 112.00 is likely seen as its next support level.

Looking ahead, Canada wholesale sales for January are scheduled for release at 8:30 am ET.

Eurozone flash consumer sentiment index for March is set for release at 11:00 am ET.

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