Investors were watching the Japanese yen as it traded at 125.58 per dollar following yesterday’s weakening from below 125 against the greenback.

“Given what we’ve seen so far, with the … dollar yen rising from 115 to 125, it’s a very sharp rise in a very short period of time,” Chang Wei Liang, foreign exchange and credit strategist at DBS Bank, told CNBC’s “Street Signs Asia” on Tuesday.

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“We think that Japanese authorities are going to be at least verbally trying to intervene in the markets and try to calm sentiment, try not to let pace of depreciation get completely out of hand,” Chang said.

In early March, the yen traded below 115 against the greenback being weakening sharply from those levels. The Japanese currency is currently approaching a two decade low, according to National Australia Bank’s Tapas Strickland.

Hot U.S. inflation report expected
Overnight stateside, the Dow Jones Industrial Average shed 413.04 points to 34,308.08 while the S&P 500 slipped 1.69% to 4,412.53. The tech-heavy Nasdaq Composite lagged, dropping 2.18% to 13,411.96.

The U.S. consumer price index for March is set to be released during ET time Tuesday, with the White House warning that it expects the report to show inflation that is “extraordinarily elevated.” Economists polled by Dow Jones expect the data to show an 8.4% annual increase in prices, the highest since December 1981.

“Very high US inflation will keep alive market expectations for aggressive FOMC tightening in our view,” said Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.

“We expect the FOMC will respond to strong underlying inflation by increasing the Funds rate by 50bp in May and in June,” Kong said.

Oil rises more than 1%
Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures climbing 1.71% to $100.16 per barrel. U.S. crude futures gained 1.94% to $96.12 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.137 — continuing to hold above the 100 level.

The Australian dollar was at $0.7433, still lower than levels above $0.744 seen yesterday.

— CNBC’s Evelyn Cheng contributed to this report.

China Economy