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In the early Tokyo session, the USD/JPY pair aims to surpass the key resistance level of 141.00. The asset is anticipated to extend its rally towards 141.00 as the market anticipates that robust household consumption expenditure in the United States will force the Federal Reserve (Fed) to continue its policy-tightening binge in order to maintain inflationary pressure.

S&P500 futures have registered stellar gains in early Asian trading as US President Joe Biden sends the US debt-ceiling increase agreement to Congress following Republican approval. As a result of the two-year extension of the $31.4 trillion borrowing limit, fears of a U.S. default have begun to subside. The White House has declared that the agreement will not reduce health coverage or increase destitution.

However, concerns of additional interest rate announcements have increased as the U.S. economy demonstrates resilience despite increased pressure on consumers' pockets due to higher rates. The core Personal Consumption Expenditure (PCE) of the United States grew by 0.4% in April, exceeding the 0.3% forecast. Individual spending increases in the United States are anticipated to exacerbate inflationary pressures. Aside from these items, US Durable Goods Orders grew by 1.1% while the consensus estimate was for a 0.0% decline.

On the front of the Japanese Yen, Tuesday's Employment data will be closely monitored. The unemployment rate is anticipated to fall to 2.7% from 2.8% previously. While the Job-to-Applicant Ratio is anticipated to remain unchanged at 1.32.

Meanwhile, investors are keeping a keen eye on the Bank of Japan's (BoJ) further adjustments to Yield Curve Control (YCC). Governor Kazuo Ueda of the Bank of Japan stated that the central bank is weighing strategies for adjusting YCC. As part of YCC, he added, the duration of bond yield benchmarks will be reduced to a 5-year range from the current 10-year range.

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