The Japanese yen lost ground against its major counterparts in the Asian session on Tuesday, as optimism that the global economy can withstand the impact of the Omicron coronavirus variant reduced the demand for safe-haven assets.

Even though coronavirus cases surged in the U.S., Europe and UK, the number of deaths and hospitalizations remained low.

Japan's Nikkei index is trading on a positive note, following the broadly positive cues from Wall Street overnight.

The currency was further weighed by a spike in U.S. treasury yields on Fed rate hike expectations.

Investors are pricing in at least three rate hikes from the Fed amid inflationary pressures and an improvement in the labor market.

The yen declined to 115.82 against the greenback, a level unseen since 2017. The yen may challenge support around the 119.00 level.

The yen weakened to a 4-day low of 156.01 against the pound, from a high of 155.22 seen at 5 pm ET. On the downside, 160.00 is seen as its next likely support level.

Reversing from an early high of 130.20 against the euro and a session's high of 125.33 against the franc, the yen edged down to 130.90 and 126.13, respectively. The yen is seen finding support around 132.00 against the euro and 128.00 against the franc.

The yen pulled back from its prior highs of 90.36 against the loonie and 78.15 against the kiwi and a session's high of 82.83 against the aussie, dropping to 90.98, 78.71 and 83.54, respectively. The yen is likely to face support around 92.00 against the loonie, 80.00 against the kiwi and 85.00 against the aussie.

Looking ahead, U.K. mortgage approvals data for November, German jobless rate and U.K. manufacturing PMI for December will be released in the European session.

Canada industrial product price index for November and U.S. ISM manufacturing PMI for December are set for release in the New York session.

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Japanese Yen Falls To 5-year Low Against U.S. Dollar