How the Asian Forex Session Works in Forex Trading

The Asian forex session is the daily starting gun for global currency markets. Before London wakes and long after New York closes, Asia’s dealers, corporates, asset managers, and retail participants define the first liquidity template of the day. Prices discovered in Tokyo, Singapore, Hong Kong, and Sydney establish the opening ranges that London will test and New York will ultimately resolve. For traders who think in terms of market microstructure as much as macro narrative, understanding Asia’s rhythms—what trades, why it moves, which pairs behave, and when liquidity thins—translates into tighter execution, more disciplined risk, and cleaner strategies.

Despite stereotypes that “nothing happens in Asia,” the truth is nuanced. Asia’s hours (roughly 22:00–08:00 UTC) can be deceptively calm on some days and sharply directional on others, especially when local catalysts land (policy, inflation, jobs, PMI, fixings) or when global risk has shifted on the U.S. close. Spreads are typically tighter in regional pairs (USD/JPY, AUD/USD, NZD/USD, USD/SGD, USD/CNH) and wider in European crosses. Corporate hedging, options hedging around the Tokyo fix, and custody flows can nudge markets even in the absence of headlines. The session’s tempo changes again around the Tokyo lunch lull, then re-energizes as Singapore and Hong Kong take the baton and volume builds into the London handover.

This guide provides a comprehensive walkthrough of how the Asian session operates in practice. We map trading hours by venue, the microstructure behind spreads and depth, the real drivers of volatility, and the specific tactics that improve entries and exits. We examine the role of fixings (Tokyo, CNH), options expiries, commodity linkages (AUD, NZD), and China-sensitive flows that ripple across Asia. We compare the Asian session with London and New York to surface what is truly unique, then turn insights into strategy playbooks—ranging from mean-reversion around session opens to event-driven momentum and session overlap techniques. Finally, we close with a clean conclusion and an FAQ you can keep open on your desk.

Session Map and Core Trading Hours

The Asian session is a constellation of overlapping centers rather than a single exchange. The most relevant clocks:

• Sydney (Australia): Opens the global week; useful for G10 commodity FX (AUD, NZD). Activity rises into Tokyo’s open. Approx. 21:00–06:00 UTC (varies with DST).
• Tokyo (Japan): The anchor for USD/JPY and yen crosses; home to sizable interbank and options activity. Approx. 23:00–08:00 UTC.
• Singapore & Hong Kong: Key liquidity hubs for USD/SGD, USD/CNH, regional crosses; strong institutional presence. Approx. 01:00–09:00 UTC.
• Shanghai (onshore CNY): Domestic hours matter for CNY fix and policy signaling; CNH reacts offshore. Typically 01:30–07:00 UTC for the main cash session.

Liquidity is not uniform. A typical night begins with thinner spreads at the Sydney open, improves materially as Tokyo comes online, dips around Tokyo lunch, then thickens as Singapore/Hong Kong hit full stride. The final hour before London often pre-positions for European data, with books lightening or adding optionality depending on the calendar.

Microstructure: Who Trades and Why It Matters

Asia’s flow is a composite of: (1) interbank/LP market-making and risk transfers; (2) corporate hedging linked to trade invoices, commodity flows, and balance sheet management; (3) asset manager rebalancing; (4) options desks hedging vega/theta and delta around expiries; and (5) retail activity, which can be locally concentrated in JPY, AUD, NZD, SGD, and CNH pairs. Because a higher share of price discovery in Asia occurs through bank-to-bank venues and primary dealers (versus lit exchange prints), depth can be fragmented across streams. Good aggregators help; poor ones widen/slip.

Three structural features shape price action:

• Regional specialization: USD/JPY, AUD/USD, NZD/USD, USD/SGD, and USD/CNH are better behaved (tighter spreads, more two-way interest). EUR crosses and Scandis often feel “offshore” and price with wider spreads.
• Fixings and reference points: The Tokyo fix (~00:55–01:05 UTC) can concentrate one-way flow as corporates convert; CNH reacts to the PBoC CNY fix later in the morning local time. These windows can flip intraday momentum.
• News deserts vs bursts: Asia may see fewer Tier-1 global headlines, but local macro (BoJ remarks, Australia jobs/CPI, China PMIs, Japan Tankan, Singapore CPI/exports) can generate sizable moves when the book is light.

Spreads, Depth, and Volatility Patterns

Relative to London/New York, average spreads in Asia are:

• Tightest: USD/JPY, AUD/USD, NZD/USD during Tokyo/Singapore prime hours.
• Moderate: USD/SGD, USD/CNH (offshore), JPY crosses (EUR/JPY, AUD/JPY) except around thin patches.
• Widest: EUR crosses outside EUR/JPY, exotics, and EM pairs not centered on Asia.

Volatility has a “two-hump” shape: an initial burst around Tokyo open/fix, a midday lull, then re-acceleration into the London handover—especially if European data loom. Mondays and post-holiday reopenings can be choppier as books reset; Fridays may slow after Asia if the global calendar is light.

What Actually Moves Markets in Asia?

Catalysts cluster into six buckets:

• Local macro: Australia employment/CPI, Japan CPI/Tankan, China PMIs/credit, Singapore inflation/exports. Pairs most affected: AUD/USD, NZD/USD, USD/JPY, USD/CNH, USD/SGD.
• Central bank signaling: BoJ policy hints (yield-curve control shifts), RBA/RBNZ guidance, PBoC operations and fixes. Yen and CNH can gap on surprises.
• Commodity shocks: Iron ore, coal, LNG, and dairy prints ripple into AUD/NZD; oil shocks matter for JPY via terms of trade.
• Risk sentiment handoff: An ugly U.S. equity close or a credit headline can carry into Asia, pressuring high-beta FX.
• Options dynamics: Large expiries with strikes near spot and dealer hedging behavior can magnetize price or accelerate a break.
• Fixings: Tokyo fix corporate flows and the CNY daily fix (impacting CNH) redirect momentum without fresh “news.”

Execution Tactics that Matter in Asia

Micro improvements compound. Five tactics that consistently help:

• Avoid market orders right at the Sydney open: Depth is thin; favor limits or wait for Tokyo.
• Respect fix windows: If you are fading moves, do it after the flow clears, not in front of it.
• Use partial fills and OCOs: Asia’s microstructure can produce stepwise moves; ladder entries/exits.
• Target Asian pairs in Asian hours: Trade EUR/GBP during Europe; trade AUD/JPY, USD/JPY, USD/SGD during Asia.
• Calibrate stops by ATR fraction: Vol is lower; too-wide stops waste risk; too-tight stops invite churn.

Strategy Playbooks for the Asian Session

Turn session structure into an edge with these playbooks. Each requires discipline, pre-trade plans, and a known news calendar.

1) Tokyo Open Mean Reversion (USD/JPY, AUD/JPY): Identify an outsize move into the first 60 minutes without a fresh catalyst. Fade toward the prior session’s Volume-Weighted Average Price with tight risk. Stand aside on policy/data days.

2) Fix Fade / Follow: Measure the direction and size of the run into Tokyo fix. If the flow is corporate-driven and exhausts near the window, fade the last push with a stop past the spike high/low. If a macro catalyst aligns with the fix flow, trade follow-through instead.

3) Asia-to-London Hand-off Momentum: When Asia has established a clean trend with a catalyst (e.g., AU CPI beat, BoJ tweak), hold a core position into the London open with a trail below/above the Asian session midline. London often extends valid Asian impulses.

4) CNH Compass: Use the CNY fix vs expectations to gauge CNH direction. If the fix signals firmness and USD/CNH breaks lower, AUD and Asian FX can ride the tailwind; lean with it using AUD/USD or AUD/JPY.

5) Quiet-Range Harvest: On catalyst-light nights, bracket a well-defined range (support/resistance formed during Tokyo) and scalp ¼–½ ATR clips. Hard stop if London data threatens to break the cage.

Risk Management for Overnight Trading

Overnight risk is a common feature for Western-based traders in Asia. Manage it consciously:

• Event map: Pre-flag AU/NZ/JP/CN/SG key prints. Reduce size ahead of Tier-1 events.
• Gap-aware sizing: Rare but real gaps happen on policy shocks. Position small enough to survive slippage.
• Time-based rules: If you cannot monitor Tokyo fix or London handover, either flatten or switch to defined-risk structures (options) ahead of those windows.
• Broker selection: Favor LP aggregation and clear execution policies for Asia; avoid single-venue pricing at off-peak hours.

Asian Session vs London vs New York (Comparison Table)

Feature	Asian Session	London Session	New York Session
Approx. Hours (UTC)	22:00–08:00	07:00–16:00	12:00–21:00
Liquidity Profile	Strong in JPY, AUD, NZD, SGD, CNH; thinner in EUR crosses	Deepest across G10; benchmark discovery	Deep, especially during London–NY overlap
Typical Spreads	Tightest in USD/JPY, AUD/USD; wider for EUR crosses	Tight across majors	Tight across majors; may widen late day
Main Catalysts	BoJ/RBA/RBNZ hints; AU/JP/CN/SG data; fixings	UK/EU data; ECB/BoE; risk flow	US data; Fed; equities/credit lead
Best Targets	USD/JPY, AUD/JPY, AUD/USD, NZD/USD, USD/SGD, USD/CNH	EUR/USD, GBP/USD, EUR/GBP, USD/CHF	USD majors; commodity FX follow-through
Common Tactics	Fix fade/follow; CNH compass; quiet-range harvest	Breakout/Trend; event fades; cross-arb	Event momentum; risk-on/off extensions
Key Pitfalls	Trading illiquid crosses; ignoring fix windows	Overtrading chop around data	Chasing late day reversals into illiquidity

Pairs and Behaviors: What to Expect

Every Asian-centered pair has a personality:

• USD/JPY: Asia’s bellwether. Sensitive to BoJ hints, UST yields, equity risk. Tokyo fix flow matters; watch 00:55–01:05 UTC.
• AUD/USD & AUD/JPY: Commodity and China proxies. React to Australia data and CNH tone. Asia-friendly spreads.
• NZD/USD: Smaller liquidity than AUD; sharp on NZ data. Great for event plays, less so for large size in quiet times.
• USD/SGD: Stable, policy-aware pair. Good for disciplined range tactics and macro-follow-through post data.
• USD/CNH: Offshore China proxy. The CNY fix can set the tone; policy surprises move it quickly.

Options, Fixings, and Expiries

Experienced Asia traders blend spot with awareness of options and fixings:

• Strikes near spot: Large same-day expiries can magnetize price; dealers hedge toward strikes to manage gamma.
• Fix windows: Tokyo fix concentrates one-way corporate flow, often causing short-lived overshoots. Stand aside or use structured fades.
• CNH & CNY: The daily CNY fix vs expectations provides directionality cues for CNH and sympathetically for AUD/Asia FX.

Session Overlaps and Handoffs

Overlaps amplify or reverse Asia’s moves:

• Asia→London: If Asia trends with catalyst, London often extends. If Asia drifts without news, London may reset ranges quickly.
• London→New York: NY adds U.S. data and risk tone; Asia’s imprint can fade unless the catalyst is durable (policy, inflation shocks).

Plan entries so you are not trapped mid-handover without clarity. Many pros scale down just before London unless a strong thesis is in play.

Building a Repeatable Asian Session Routine

A durable routine looks like this:

• Calendar pass: Mark AU/NZ/JP/CN/SG data, BoJ/RBA/RBNZ dates, and fix windows.
• Vol map: Calculate rolling ATR and session-specific volatility for your targets.
• Levels & plan: Identify Asia-pivotal levels (overnight highs/lows, prior VWAP, fix window extremes). Pre-write entry/exit logic.
• Execution discipline: Prefer limits around predictable liquidity. Avoid chasing in thin moments.
• Post-mortem: Record slippage, spread, and fill quality; adjust broker/LP routing if needed.

Common Mistakes (and Simple Fixes)

• Mistake: Trading EUR crosses size during early Sydney. Fix: Wait for London or trade Asia-centric pairs instead.
• Mistake: Ignoring fix windows and getting squeezed. Fix: Flatten or reduce into fix; reassess after flow clears.
• Mistake: Using New York-sized stops in Asia. Fix: Calibrate to session ATR; smaller stops, smaller targets.
• Mistake: Leaving positions unattended into Tier-1 local data. Fix: Size down, hedge, or move to defined-risk.

Case Studies: From Theory to Trades

Case 1 — Tokyo Fix Overshoot: USD/JPY rallies 40 pips into the fix on corporate demand, with no new macro. Momentum stalls post-fix; a fade back to the pre-fix midpoint works with a 10–15 pip stop and 20–30 pip target.

Case 2 — AU CPI Beat: AUD/USD gaps higher at release; spreads briefly widen then normalize. Buying first pullback to the breakout level with a stop below the print candle’s low captures London extension.

Case 3 — CNH Signal: PBoC sets a stronger-than-expected CNY fix; USD/CNH dips and drifts lower. AUD/JPY rides the pro-risk tone; a tight trend-follow entry during Singapore morning holds into London for an additional leg.

Conclusion

The Asian forex session is not a sideshow—it is the market’s opening chapter. Its microstructure, catalysts, and tempo shape the entire trading day that follows. When you internalize how Asia actually trades—where liquidity concentrates, how fixings redirect flow, which pairs behave cleanly, and when to step aside—you unlock a set of edges that thrive on preparation rather than prediction. Trade Asia-friendly pairs in Asia’s hours, respect the fix windows, size to session volatility, and let London do the heavy lifting when valid catalysts align. With this playbook, the session becomes predictable in the ways that matter: not in outcome, but in process.

The reward for that process is consistency. Fewer impulsive entries. Tighter execution. Better carry of winning positions into the London handover. And, over time, a portfolio that benefits from having three distinct opportunities each day—Asia, London, and New York—rather than attempting to force one session’s tactics onto another. Master Asia on its own terms and you will trade the rest of the day with more clarity.

Frequently Asked Questions

What are the exact hours of the Asian forex session?

There is no single exchange open/close, but practical liquidity runs from roughly 22:00–08:00 UTC. Activity improves significantly as Tokyo opens (~23:00 UTC) and again as Singapore/Hong Kong reach full speed (~01:00–02:00 UTC).

Which currency pairs are best to trade during Asia?

USD/JPY, AUD/USD, NZD/USD, AUD/JPY, USD/SGD, USD/CNH, and JPY crosses. Spreads are tighter and depth better aligned with regional flow.

What is the Tokyo fix and why does it matter?

Around 00:55–01:05 UTC, corporate conversion flows can concentrate, pushing spot one way briefly. Post-fix, that flow often fades; many traders wait to see if an overshoot offers a fade back toward pre-fix levels.

How does the China CNY fix affect trading?

The onshore CNY fix shapes offshore CNH expectations. A stronger-than-expected fix can support CNH and, by association, risk-sensitive Asia FX like AUD and some Asian crosses.

Are spreads always wider in Asia?

Not in Asia-centric pairs. USD/JPY and AUD/USD can be very tight during Tokyo/Singapore prime hours. Spreads widen in off-hours, illiquid crosses, or during data releases.

What strategies suit the Asian session?

Fix fade/follow, mean-reversion after opening spikes, CNH-led momentum, and Asia-to-London handover trend continuation when catalysts are real. Avoid forcing London-style breakouts on catalyst-light nights.

How should I size stops and targets at night?

Calibrate to session-specific ATR (e.g., 0.3–0.6× ATR for stops, 0.5–1.0× ATR for first targets). Asia’s lower vol means tighter risk and more modest profit clips.

Is it safe to leave positions unattended overnight?

Only with deliberate risk controls: reduced size, wider but ATR-proportional stops, and awareness of known data/policy times. Consider options for defined risk into major events.

What’s the biggest mistake traders make in Asia?

Trading the wrong instruments for the session (e.g., heavy EUR crosses early Sydney) and ignoring fix windows—both increase slippage and reduce expectancy.

How do I prepare for the Asia–London transition?

If Asia produced a clean catalyst-backed move, hold a core with a trailing stop. If Asia was range-bound, flatten or reduce ahead of London data and reassess when European depth appears.