finally, adding encode clause worked:

{{for x in location_data_from_postal_code['postalcodes']:}}
   {{countryCode=x['countryCode']}}
{{adminCode1=x['adminCode1']}}
{{adminName1=x['adminName1'].encode('utf-8')}}
{{adminCode2=x['adminCode2']}} 
{{adminName2=x['adminName2']}} 

-- 
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