Asian session: The yen halted gains against its major counterparts

The yen halted gains against its major counterparts after comments by the International Monetary Fund stoked speculation global policy makers will tolerate attempts by Japan to weaken its currency. The yen fell against the euro for the first time in three days after the IMF said Japan’s currency was “moderately overvalued” and the fund’s First Deputy Managing Director David Lipton said intervention can be used to avoid a disorderly market. The Bank of Japan, which is due to start a two-day policy meeting on June 14, should ease policy further, Lipton said in Tokyo today. The BOJ refrained from adding to monetary stimulus last month after expanding its asset-purchase program in April.

The Dollar Index snapped a three-day advance as Federal Reserve Bank of Chicago President Charles Evans said he would support a variety of measures to generate faster job growth. The Chicago Fed’s Evans has been “in favor of pretty much any accommodative policy,” he said in an interview with Bloomberg Television airing today. “More asset purchases would be useful. More mortgage-backed securities purchases would be good,” said Evans, who doesn’t vote on the policy-setting Federal Open Market Committee this year.

The Australian and New Zealand dollars rallied from an earlier drop amid speculation recent losses were excessive and after a private index showed the smaller South Pacific nation’s home prices climbed last month. The so-called Aussie and kiwi declined earlier as Asian shares slid on concern Italy will become the next focus of Europe’s debt crisis after Spain requested a bailout for its banks.

EUR/USD: during the Asian session the pair restored after yesterday's falling.

GBP/USD: during the Asian session the pair traded in a range $1.5460-$1.5500.

USD/JPY: during the Asian session the pair gain to a yesterday's high.

UK data at 0830GMT sees the release of industrial production data for April.  In clear focus for Tuesday, German Chancellor Angela Merkel speaks at 1200GMT at a conference organised by the CDU economic council. The Finnish PM speaks around the same time. US data continues with the 1230GMT release of the Import/Export Price Index, while at 1255GMT the Johnson Redbook weekly chain store sales are due. At 1400GMT, IMF Managing Director Christine Lagarde speaks in Washington on the UN Conference on Sustainable Development to be held in Rio De Janeiro, to the Center for Global Development.