The Australian dollar fell against its major counterparts in the Asian session on Thursday, while the Japanese yen advanced, as geopolitical concerns escalated after Ukraine's armed forces fired grenades and mortars on the territory of Luhansk People's Republic in eastern Ukraine.

Ukrainian forces fired at settlements of Sokolniki, Zolote-5, Veselenkoe and Nizhnee Lozovoe around 5:30 a.m. Moscow time. These four territories are located in Luhansk Oblast in the Donbas region, an area recognized as a part of Ukraine but run by Russian backed separatists.

The attack violates the ceasefire regime in accordance with the Minsk agreement, which bans firing and using weapons in and near populated areas in Donbass.

Earlier in the day, the U.S. said that Russia has increased the number of troops near Ukraine's borders, a claim rejected by Moscow.

This followed comments by NATO Secretary General Jens Stoltenberg that Russia was continuing to send troops to what is now the biggest concentration of forces in Europe since the cold war.

The aussie dropped to 1.5847 against the euro, 0.7150 against the greenback and 0.9099 against the loonie, off its early multi-week high of 1.5773, 1-week highs of 0.7215 and 0.9158, respectively. The aussie may face support around 1.62 against the euro, 0.70 against the greenback and 0.88 against the loonie.

The aussie weakened to a 3-day low of 1.0728 against the kiwi and a 2-day low of 82.33 against the yen, down from its prior high of 1.0774 and a 1-week high of 83.34, respectively. The aussie is seen challenging support around 1.06 against the kiwi and 80.00 against the yen.

The yen appreciated to 3-day highs of 115.11 against the greenback and 130.41 against the euro, from its early lows of 115.54 and 131.50, respectively. The next possible resistance for the yen is seen around 112.00 against the greenback and 127.5 against the euro.

The yen advanced to 2-day highs 156.11 against the pound and 124.74 against the franc, after dropping to 157.06 and a 6-day low of 125.40, respectively in early deals. The yen is poised to find resistance around 153.00 against the pound and 119.00 against the franc.

The yen recovered from an early low of 91.03 against the loonie and touched a 2-day high of 90.43. Next key resistance for the yen is seen around the 88.00 level.

The yen edged up to 76.69 against the kiwi, up from a 6-day low of 77.41 seen earlier in the session. The yen may test resistance around the 74.00 level, if it rises again.

Looking ahead, U.S. weekly jobless claims for the week ended February 12, housing starts and building permits for January are due out in the New York session.

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