Fundamentals

The yen depreciated vis--vis the U.S. dollar today as the greenback tested offers around the 107.90 level and was supported around the 107.15 level. Technically, todays intraday low was right around the 23.6% retracement of the move from 102.65 to 108.55. The pair reached its highest level since 26 June. Traders await the release if consumer price inflation data on Friday. Some dealers believe the yen could correct a little bit if consumer price inflation prints above 2.0%. Bank of Japans "understanding of stable prices" is pegged at 0% to 2.0%. The central bank has recently confirmed it sees inflation and growth risks to be roughly balanced thus a further spike in inflation is unlikely to have a major impact on monetary policy now. The Nikkei 225 stock index gained 0.97% to close at 13,312.93. Dollar bids are cited around the 103.65 level. The euro came off vis--vis the yen as the single currency tested bids around the 169.10 level and was capped around the 169.95 level. The British pound moved higher vis--vis the yen as sterling tested offers around the 215.85 level while the Swiss franc weakened vis--vis the yen as the pair tested bids around the 103.75 level. The Chinese yuan depreciated vis--vis the U.S. dollar as the greenback closed at CNY 6.8297 in the over-the-counter market, up from CNY 6.8217.