The Japanese yen gained ground against its major rivals in late Asian deals on Tuesday, in reaction to comments by an adviser to Japanese Prime Minister that the dollar-yen pair's present levels are "upper limit of comfort zone."

In an interview with The Wall Street Journal on Monday, Etsuro Honda, an economic adviser to Japanese PM Shinzo Abe, told that the Bank of Japan should avoid extra stimulus measures for some time as economy "could overheat over the latter half of this year."

As long as the decline in inflation rate is driven by oil prices plunge and if Japan's demand-supply gap is improving, "additional easing shouldn't be undertaken." Otherwise, the economy "could overheat over the latter half of this year," he added.

Honda said that the dollar-yen exchange rate is likely to rise further from its current levels around ¥120, which may be the upper limit of its comfort zone.

The yen was also supported by decline in Japanese stocks. Japan's benchmark Nikkei 225 Index ended down on profit taking.

In economic news, Japan's monetary base spiked 36.7 percent on year in February, coming in at 275.261 trillion yen, data from the Bank of Japan showed.

That follows the 37.4 percent annual surge in January.

The yen rose to a 4-day high of 183.89 against the pound and a 5-day high of 124.85 against the Swiss franc, from yesterday's closing quotes of 184.54 and 125.27, respectively. The next possible resistance for the yen is seen around 180.00 against the pound and 124.00 against the franc.

Moving away from an early near 3-week low of 120.25 against the U.S. dollar, the yen climbed to a 4-day high of 119.56. At yesterday's close, the pair was trading at 120.11. If the yen extends rise, 118.00 is possibly seen as its next resistance level.

The yen edged up to 133.87 against the euro in early deals, and held steady thereafter. The yen is likely to find resistance around the 132.5 area.

Looking ahead, Markit/CIPS U.K. construction PMI for February and eurozone PPI for January are slated for release shortly.

At 5:00 am ET, Bank of England Governor Mark Carney will testify on the currency probe before the Treasury Select Committee in London.

In the New York session, Canada GDP for fourth quarter and industrial product price index for January are due to be released.

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