Euro-Yen (EURJPY), Australian Dollar (AUDUSD) Gain as Asian Stocks and U.S. Futures Rally

Risk aversion was the theme at the start of the Asia session in the wake of the late slump in the DJIA in New York on Monday. USD-JPY and JPY crosses were under pressure, though with a brief bounce in both USD-JPY and JPY crosses into the Tokyo fx, that reversed quickly. USD-JPY and EUR-USD came under selling pressure as the Nikkei lost ground with USD-JPY falling to 92.65 and EUR-USD to 1.2329. But, a recovery in the Nikkei in the afternoon shifted the mood of the market, with the Nikkei rising 4 percent, and South Korean stocks rising over 5%. Taiwan stocks reversed earlier losses and HK stocks were up over 3% while DJIA futures posted triple digit gains. This fueled a USD-JPY rally back to 94.00, near the morning fixing highs. EUR-USD bounced to 1.2476 as a result as EUR-JPY rallied from morning lows of 114.41 to highs of 117.29. Intervention was still a theme for the market however with S. Korea intervening on the KRW and the MAS threatening possible action to dampen volatility on the SGD trade-weighted policy band. The Philippine central bank intervened on the PHP and is considering tighter limits for bank positions. The RBA intervened early in the session on the AUD, for the third time since Friday. Commodities were under pressure with Nymex Dec crude futures falling under $63, while gold dropped over $10 at one stage. Copper and zinc prices were limit down in trading in Asia. U.S. treasury yields eased with weaker stocks earlier in the session.