USD-JPY activity was the highlight in N.Y. trade on Tuesday, after a G7 official said the statement was misinterpreted, according to news wire headlines. The statement signaled concern over excess yen movements, said the unnamed official. The G7 is concerned about unilateral guidance on JPY and said that Japan "will be in the spotlight at the G20 meeting in Moscow," according to Reuters. USD-JPY dropped a full yen to 93.28 before finding support. Later in the session, the pairing dipped briefly under 93.00, though buyers returned quickly under the figure. Elsewhere, EUR-USD found support ahead of 1.3400, and advanced over 1.3475, while cable followed higher as well. There was no data to drive markets on Tuesday, while equities were mostly higher, providing modest weight to the dollar.

[EUR, USD]
EUR-USD dipped to 1.3410 after EUR-JPY plunged following the reclarification on FX policy by a G7 official after the market "misinterpreted the official statement" in the European morning. After signaling market determined exchange rates and talking against excessive volatility the latest comments have been met with derision in the blogosphere. EUR-JPY fell from 126.70 to the 125.10 area, but good bids held at 125.00 and it backed up almost immediately to 125.90. Asian session EUR-USD resistance under 1.3415 flipped to support in morning trade, with buyers at the level emerging ahead of the pairing's move up to 1.3475. Intra day stops are reported under 1.3400, though those appear to be out of harm's way for now. Sellers in front of barrier options at 1.3500 are in place from 1.3480.

[USD, JPY]
USD-JPY reached new intra-day lows under 93.00 after a steady bout of profit taking went through from 94.00. We noted the lack of liquidity on the way down on the earlier slump, but this time support was filled in around 93.40-50 and 92.25-30 as some buyers returned. After today's volatility the upside could be more limited as the market looks to the G20 for guidance. USD-JPY movement over 94.00 today has met both Japanese corporates and option names defending a 94.50 barrier. In recent sessions, movement on a 92 handle has met buyers into 92.50 and the 92.00 area from Japanese names and offshore funds. Intra-day accounts may be tempted to buy the dip, while 93.00 holds. Specs will not be keen on adding to positions ahead of the G20 though, which is likely to take on greater significant now. Comments from Japanese officials will be interesting tomorrow after Finance Minister Aso welcomed the earlier statement.

[GBP, USD]
GBP was being helped by corporate support, leaving Cable close to 1.5600 in early trade after it recorded trend lows around 1.5575 during the European morning. Fund names were heavy sellers after the European open and were encouraged after Cable extinguished long-term support on the way down, which boosted EUR-GBP from 0.8540 to 0.8630. Tomorrow's BoE Inflation Report will be pivotal, though as cable found some footing, making its way to 1.5670 highs, the downside may be limited until then.

[USD, CHF]
EUR-CHF jumped after SNB Jordan said the risk of extreme FX fluctuations continues to exist and it will maintain the ceiling on the CHF and will take additional measures if necessary. Jordan said that there has been a rebound in global confidence in the markets, but the franc is still strong against the euro at current levels. However, Jordan did not think there was a currency war underway and backed policies with a domestic objective. EUR-CHF moved up from 1.2290 to trade into 1.2350. Early on in the session, Swiss CPI data came in as-expected at -0.3% and did not impact the CHF.

[USD, CAD]
USD-CAD eased back to 1.0050, from highs over 1.0085 in early North American trade. News that Canada's Nexen has received all necessary approvals to be taken over by China's CNOOC likely aided the loonie through the morning. The deal, worth about C$15 bln, is expected to close on February 25th, and could continue to weigh on USD-CAD. Afternoon dealings saw the pairing bump along over 1.0020, where option related buying was noted. Strikes at parity are reportedly rolling off on Wednesday, and may attract some attention through the overnight session.