And a pullback in US bond yields overnight should have local traders looking to add risk, especially with the FOMC unlikely to out-hawk the market later this week. Asian foreign exchange traders will be particularly attentive to any signs of Japanese intervention on Tuesday, following reports of Tokyo's involvement in the market on Monday. This intervention action propelled the yen upward from its 34-year low of 160 per dollar, setting off shockwaves of volatility.
Market participants will closely monitor any further statements from Japanese officials at this juncture to determine whether this intervention will constitute an ongoing intervention regimen There's a historical tendency in FX markets to fade the JPY intervention rally and test officials' resolve although the recent 160 USD/JPY highs could be a bridge too far.