Session Recap: Yen enjoys follow thru; Euro convulsed

Following the disproportionate gains in the Yen along a bustling Monday American session, in which the deadlock in the Italian Senate came as the perfect excuse to trigger the unwinding of Yen shorts, speculators in the far east have followed the path of least resistance.

After bargain hunters made their quick pips in the early going of the session, the Japanese currency has managed to pare losses vs its main competitors around the Hong Kong open, with Yen crosses ending near its NY close levels.

Meanwhile, the Euro has enjoyed very shallow rebounds, a clear reflection of the weakened outlook it faces as the Italian political mess may spread out to peripheral bonds. With regards to the Australian Dollar, the currency saw early pressure on RBA's headlines, yet managed to recover. The Pound has been able to hold the ground like a champ.

Main headlines (in chronological orders)

- Wall Street tumbles on Italy election fears

- Italy headed towards ungovernability

- Epic falls in all Yen crosses; Hedge funds unwind massive longs

- Quick facts from Monday, like 38 calendar days of gains in the S&P500 gone...

- AUD/USD threatens 1.0225 double bottom; RBA's Debelle headlines unsupportive

- RBA’s Asst Gov Debelle: No limit on ability to sell A$ should intervention be warranted

- The risk trade will never die

- New leaders at the BOJ – what’s going to change?

- Italian Interior Ministry: Centre-left wins lower house, Senate is deadlocked

- Italy faces tough times, so does the Euro...

- Further EUR weakness expected - RBS

- Recap of Fed’s Lockhart comments

- Get ready for the new BoJ's leadership - Nomura

- USD/JPY returns to the downside below key 92.20

Japan’s ‘Your Party’ has told Abe it does not support Kuroda as BOJ head – old news

- EUR/JPY sellers win 38.2% fib battle; breaks sub 120.00 again

- Cataclysm in the Euro as Italian politics hit 'punto morto'