The Japanese yen strengthened against its most major rivals in the early European session on Tuesday amid risk aversion, as investors adopted a cautious stance ahead of the U.K. Prime Minister Theresa May's speech, which is expected to outline a "hard" exit from the European Union.

Investors became wary over reports that the U.K. PM is likely to prefer a clean break from the EU, quitting from its single market for goods and services and forge a completely new trading relationship with the bloc.

"Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out," May is set to say, according to excerpts released by her office.

Further dampening investor mood was growing uncertainty over U.S. policy ahead of President-elect Donald Trump's inauguration later this week.

Final figures from the Ministry of Economy, Trade and Industry showed that Japan's industrial production increased as initially estimated in November.

Industrial production rose a seasonally adjusted 1.5 percent month-over-month in November, after remaining flat in the previous month. That was in line with the flash data published on December 27.

The currency has been trading in a positive territory in the previous session.

The yen climbed to 113.26 against the greenback, its strongest since December 8, while approaching nearly 3-month high of 86.40 against the loonie. The yen is likely to challenge resistance around 110.00 against the greenback and 84.00 against the loonie.

The yen strengthened to a 1-1/2-month high of 120.67 against the euro and near a 6-week high of 112.47 against the Swiss franc, compared to Monday's closing values of 121.01 and 112.77, respectively. If the yen extends rise, it may find resistance around 118.00 against the euro and 111.00 against the franc.

On the flip side, the yen dropped to 137.83 against the pound, from a high of 137.06 hit at 4:00 am ET. The next possible support for the yen may be found around the 138.00 mark.

Looking ahead, European Central Bank Governing Council Member Ewald Nowotny takes part in a panel discussion on "euro reforms in turbulent times" in Vienna at 6:00 am ET.

In the New York session, U.S. Empire State manufacturing index for January is slated for release.

At 8:45 am ET, Federal Reserve Bank of New York President William Dudley is expected to speak about consumer behavior at the National Retail Federation Convention and Expo, in New York.

At 10:00 am ET, Federal Reserve Board Governor Lael Brainard is expected to speak on monetary and fiscal policy before the Brookings Institution, in Washington, U.S.

Subsequently, Federal Reserve Bank of San Francisco President John Williams is expected to speak before the Sacramento Business Review Economic Forecast event, in Sacramento, U.S.

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