CENTCOM said the US-Arab joint task force will stand up within the next few weeks.

USD/JPY was trading around 163.85 in the Asian session on Tuesday. The dollar lacked direction as investors awaited the Fed policy decision on Wednesday. CME FedWatch shows a 62% probability the Fed will keep rates at 3.50%-3.75% and signals a higher chance of a September hike. Market participants do not expect the policy statement or the chair's press conference to provide rate guidance; the chair said at the last meeting that "forward guidance is not applicable at the current policy juncture." Traders are focused on how long US inflation will remain above the Fed's 2% target. In Tokyo, investors await the BOJ decision on Friday, with the central bank expected to keep the policy rate at 1% and to strike a hawkish tone on the outlook.

Japan's finance minister KATAYAMA said the Government Pension Investment Fund (GPIF) portfolio should help households benefit from the economic recovery driven by the government's growth strategy.