• The dollar pulled away from five-month lows versus the yen on Tuesday, with comments from U.S. Treasury Secretary Steven Mnuchin and higher debt yields giving the bruised greenback some breathing space.
Still, the dollar was capped by nervousness about Tuesday's economic dialogue between the United States and Japan. Lingering worries about North Korea and the coming French presidential elections also kept a lid on the dollar against the safe-haven yen.
The dollar added to overnight gains and was up 0.1 percent at 109.040 yen after rising briefly to 109.225. It had sunk to a five-month trough of 108.130 earlier on Monday on worries about tensions in the Korean Peninsula.
The dollar index, measuring it against a basket of major currencies, was flat at 100.290 .DXY after popping up to 100.400 earlier in the session.
The euro was a shade higher at $1.0652 EUR=, having seen limited movement on Monday when many European markets were shut for the Easter holiday.
• JP Morgan equity strategists on Tuesday said they still expected independent centrist Emmanuel Macron to win the French presidential election, even though they noted the race had tightened after a rise in polls for far-left candidate Jean-Luc Melenchon.
JP Morgan shared the view of other top investment banks by stating that the key negative risk for financial markets was the possibility Melenchon could face far-right, National Front leader Marine Le Pen in the May 7 decisive, second-round vote.
"Should Melenchon and Le Pen both enter the second round, euro zone equities would likely pull back sharply," JP Morgan's team wrote in a note.
• The muted market reaction to recent hints from the U.S. central bank that reductions to its $4.5 trillion balance sheet could begin later this year suggests the policy shift may go smoothly after all, Federal Reserve Vice Chair Stanley Fischer said on Monday.
• President Donald Trump on Tuesday will sign an executive order directing federal agencies to recommend changes to a temporary visa program used to bring foreign workers to the United States to fill high-skilled jobs.
• U.S. Vice President Mike Pence and Japanese Prime Minister Shinzo Abe agreed on Tuesday that the two countries need to persuade China to play a larger role in dealing with North Korea, a Japanese government spokesman said.
• Japanese Deputy Prime Minister Taro Aso said he would discuss a broad framework on bilateral economic cooperation with U.S. Vice President Mike Pence without going into any details in their first round of talks on Tuesday.
Speaking at a regular news conference, Aso, who is also finance minister, said he would not discuss any bilateral free trade agreement with Pence when he visits Tokyo on Tuesday.
• China and Russia have dispatched intelligence-gathering vessels from their navies to chase the USS Carl Vinson nuclear-powered aircraft carrier, which is heading toward waters near the Korean Peninsula, multiple sources of the Japanese government revealed to The Yomiuri Shimbun.
It appears that both countries aim to probe the movements of the United States, which is showing a stance of not excluding military action against North Korea. The Self-Defense Forces are strengthening warning and surveillance activities in the waters and airspace around the area, according to the sources.
• Chinese Foreign Minister Wang Yi said on Tuesday diplomatic means must be used to resolve tensions on the Korean peninsula, where North Korea has vowed to continue with its nuclear and missile programs in defiance of U.N. sanctions.
• Oil prices fell in thin trade on Tuesday after the Easter holiday break shut many markets for as long as four days and as a U.S. government report indicated rising production.
Benchmark Brent crude futures were down 4 cents at $55.32 at 0649 GMT (2:49 a.m. ET). They ended a quiet session on Monday down 53 cents at $55.36, after rising the three previous weeks.
U.S. West Texas Intermediate (WTI) crude futures were also down 4 cents at $52.61 a barrel. They settled down 53 cents at $52.65 a barrel.
Thai
Eng