A breakthrough in trade talks with the U.S. might win Ishiba a reprieve, but so far there's been scant sign of progress in negotiating away the threat of higher tariffs on Japan's exports to the U.S. beginning Aug. 1.

Trump, who sued the WSJ and its owners including Rupert Murdoch for at least $10 billion on Friday over the newspaper's report on a 2003 birthday greeting from Trump to sex offender Jeffrey Epstein, denied the latest WSJ report on Bessent too.

The currency traded in the mid-147 level, sustaining the roughly 1% appreciation it notched the previous day, which was a holiday in Japan. The yields on the benchmark 10-year Japanese government bond (JGB) hit 1.535% at one point on Tuesday, a basis point higher from Friday's closing. Yields move inversely to prices.

Investors will be keeping a close watch on the People’s Bank of China’s decision on its 1-year and 5-year loan prime rates for July, expected later in the day.

Japanese markets were closed for a holiday and global currency markets offered the only clear sign of a reaction. The yen , which had hit a three-month low of 149.18 per dollar last week, firmed to just under 147.7 after the results. That dragged the dollar (.DXY) down across the board.

A re-run of last summer’s turmoil where a rise in the Japanese yen caused chaos throughout financial markets is threatened by this weekend’s Japanese elections, a strategist warns.

The U.S. Dollar (DXY) fell on Monday, while the Japanese yen firmed against the dollar after the country’s ruling coalition lost its majority in the upper house.  However, Japanese Prime Minister Shigeru Ishiba said he will remain in office,

The Indian rupee is poised to open slightly higher on Tuesday, supported by a retreat in the dollar index that was largely triggered by a post-election rally in the Japanese yen.