A look at the day ahead in European and global markets from Gregor Stuart Hunter

The yen is again hovering close to its weakest levels in 40 years with the threat of joint intervention looming large after Japan's finance minister and the U.S. Treasury secretary held an online meeting to discuss global financial market conditions.

The yen was trading at 161.60 per dollar in the Asian morning on Tuesday, its weakest level in two years, after moving within a few pips of levels not seen for decades during U.S. trading hours.

Intervention by the Ministry of Finance since April and rate hikes from the Bank of Japan have done little to arrest the slump in the currency.

Elsewhere, South Korean shares fell more than 6% after the country's finance minister, Koo Yun-cheol, said at a cabinet meeting on Tuesday that the current foreign exchange level at around mid-1,500 won per U.S. dollar is "excessive."

Losses for the KOSPI index, which closed at a record high on Monday, triggered a brief trading halt and dragged MSCI's broadest index of Asia-Pacific shares outside Japan 1.5% lower.

Japan's Nikkei 225 retreated 1.2%, pulling back after an eight-day winning streak, even as data on Tuesday showed the country's manufacturing sector sustained robust growth in June, with a gauge of new orders surging to the fastest pace in more than four years.

Brent crude was 0.4% lower at $77.56 a barrel after the United States waived sanctions on Iran for 60 days from Monday after the first talks under a nascent peace deal, while officials reported a sustained lull in fighting in Lebanon under the agreement aimed at ending hostilities across the region.

S&P 500 e-mini futures were down 0.5%, extending declines after tech megacaps weighed on stocks on Wall Street on Monday.

In early European trades, pan-region futures were down 0.6%, German DAX futures were 0.7% lower and FTSE futures fell 0.8%.

Key developments that could influence markets on Tuesday:

Company earnings:

FedEx ( FDX ), Cerebras Systems ( CBRS ), Carnival Corp ( CCL )

Economic events:

France: Business Climate for June, S&P MFG Flash PMIs for June

Germany: S&P Flash PMIs for June

Euro zone: S&P Flash PMIs for June

UK: Flash PMIs for June and CBI Trends for June

Debt auctions:

Germany: 2-year government debt