USD/JPY traded in tight ranges overnight, with gains capped at around 76.80.

Finance Minister, Mr Azumi, again alluded to Japan, extending help to Europe via the IMF. He said both Japan and China need to seek a realistic way of achieving this, though the attitude of the US would determine the IMF's role in Europe's sovereign debt crisis. With risk assets off to a good start in 2012, treasury markets have remained relatively subdued. Bond prices are showing little reaction to improving US economic data.

There's little to do here except to wait for more clarity on the European situation, if there will be any up ahead. That leaves Treasuries stuck in micro ranges, and dealing volumes falling precipitously. Bar intervention, USD/JPY is likely to maintain its tight range.