The yen slipped against its major counterparts in the European session on Thursday, as approval of the U.S. debt ceiling deal by the House of Representatives and comments from Fed officials indicating a pause in interest rate hikes lifted risk sentiment.

The U.S. House of Representatives approved a debt ceiling and budget cuts package on Wednesday. The bill now heads to the Senate with passage expected by weekend.

Fed Governor Philip Jefferson and Philadelphia Fed President Patrick Harker supported the possibility of holding rates steady at the next meeting in June.

Money markets are now pricing in a 66.8 percent chance of a pause at the June meeting, up from a 48.3 percent chance last week.

Elsewhere, China Caixin/S&P Global manufacturing PMI rose to 50.9 in May from 49.5 in April, helping ease concerns that China's economic recovery was stalling.

The yen fell to 153.77 against the franc and 139.95 against the greenback, from its early fresh 2-week high of 152.67 and a 1-week high of 138.95, respectively. The next possible support for the currency is seen around 158.00 against the franc and 145.00 against the greenback.

The yen weakened to 149.57 against the euro, 91.01 against the aussie and 84.05 against the kiwi, reversing from its early highs of 148.62 and 90.29 and a 4-week high of 83.53, respectively. The yen is seen finding support around 153.5 against the euro, 94.00 against the aussie and 86.00 against the kiwi.

The yen touched 173.92 against the pound, setting a 2-day low. The yen may locate support around the 180.00 level.

Against the loonie, the yen was down at a 2-day low of 103.06. If the currency slides again, it may find support around the 105.00 area.

Looking ahead, at 7.30 am ET, the European Central Bank is set to issue the account of the monetary policy meeting of the Governing Council held on May 3 and 4.

In the New York session, U.S. weekly jobless claims data, PMI reports from U.S. and Canada for May, U.S. construction spending for April and U.S. EIA crude oil report are slated for release.

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