The Australian and NZ dollars fell against their major counterparts in the Asian session on Thursday, while the Japanese yen firmed, amid a sell-off in Asian shares on concerns about an aggressive tightening of monetary policy by the U.S. Federal Reserve.

The minutes from the Fed's December meeting showed that the central bank is prepared for earlier and faster rate hikes in the wake of an improvement in the labor market and elevated inflation pressures.

Money markets are assigning an 80 percent possibility for a rate hike in March following the hawkish Fed minutes.

The minutes fueled a rally in U.S. treasury yields, but dragged down commodities.

Concerns over higher rates and economic risks from the rapid spread of the Omicron variant sapped demand for riskier assets and lifted the safe-haven yen.

The aussie dropped to fresh 2-week lows of 0.7167 against the greenback and 1.5775 against the euro, following its prior highs of 0.7223 and 1.5656, respectively. Next key support for the aussie is likely seen around 0.70 against the greenback and 1.585 against the euro.

The aussie pulled back from its previous highs of 83.89 against the yen and 0.9215 against the loonie, weakening to 2-day lows of 82.98 and 0.9165, respectively. If the aussie continues its fall, 80.00 and 0.90 are possibly seen as its next support levels against the yen and the loonie, respectively.

The aussie remained lower against the kiwi, at a 2-day low of 1.0612. The aussie is seen finding support around the 1.045 level.

The kiwi declined to a fresh 2-week low of 0.6742 against the greenback, 3-day low of 78.13 against the yen and more than a 2-week low of 1.6756 against the euro, down from its early highs of 0.6796, 78.92 and 1.6629, respectively. The kiwi is poised to challenge support around 0.66 against the greenback, 76.00 against the yen and 1.70 against the euro.

The yen touched 2-day highs of 130.82 against the euro, 156.51 against the pound, 126.01 against the franc and 90.49 against the loonie, off its previous lows of 131.43, 157.48, 126.72 and 91.05, respectively. The currency may possibly challenge resistance around 127.5 against the euro, 153.00 against the pound, 121.00 against the franc and 88.00 against the loonie.

The yen rose to 115.79 against the greenback, after declining to 116.19 at 7:30 pm ET. On the upside, 112.00 is likely seen as its next resistance level.

Looking ahead, Eurozone PPI for November, U.K. services and German construction PMIs for December are due out in the European session.

At 8:00 am ET, German preliminary CPI for December is scheduled for release.

U.S. weekly jobless claims for the week ended January 1, ISM non-manufacturing PMI for December, factory orders for November and U.S. and Canadian trade data for the same month will be released in the New York session.

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