Here some key characteristics that you should know about the Tokyo session:

[ishmaelDee]

Action isn't only limited to Japanese shores. Tons of forex transactions are made in
other financial hot spots like Hong Kong, Singapore, and Sydney.
· The main market participants during the Tokyo session are commercial companies
(exporters) and central banks. Remember, Japan's economy is heavily export
dependent and, with China also being a major trade player, there are a lot of
transactions taking place on a daily basis.
· Liquidity can sometimes be very thin. There will be times when trading during this
period will be like fishing - you might have to wait a long, long time before getting a
nibble.
· It is more likely that you will see stronger moves in Asia Pacific currency pairs like
AUD/USD and NZD/USD as opposed to non-Asia Pacific pairs like GBP/USD.
· During those times of thin liquidity, most pairs may stick within a range. This
provides opportunities for short day trades or potential breakout trades later in the day.
· Most of the action takes place early in the session, when more economic data is
released.
· Moves in the Tokyo session could set the tone for the rest of the day. Traders in latter
sessions will look at what happened during the Tokyo session to help organize and
evaluate what strategies to take in other sessions.
· Typically, after big moves in the preceding New York session, you may see
consolidation during the Tokyo session.