It would be nine to be able to open today's commentary with a stunning observation relaying how the yen got trashed overnight thanks to comments from the Japanese vice finance minister, but we can't. But the comments of Mr. Sugimoto did knock the confidence of yen buyers, which saw it lower across the board. The dollar buys ¥95.75 this morning and the euro buys ¥129.29 after his comments noting that ‘excessive moves' in currencies will harm economies. Mr. Sugimoto also said that the Japanese would continue to carefully monitor currency movements.

That song remains the same and it seems a long day since the Japanese intervened to stem currency weakness, which manifests itself in a downwards spiral of economic activity as exports become more expensive. Toyota Motors is cutting vehicle output by more than a million units to 6.5 million this year and still expects to report its first annual loss since 1959.

The drop in the yen, such as it is coincides with Moody's rating agency reducing the rating on Japan 's foreign currency rating, which brings it in line with that of the local bond ratings and as such reflects that repayment risk on both is equal. Not a big forex driver today but in conjunction with the official observations on the yen all the way from the desk of the vice minister, it's had the affect of souring the tone.

Sticking with the Asian theme, there's an interesting argument doing the rounds this morning that the Chinese are stockpiling physical commodities in response to growing fears for the financial health of its investment in U.S. government debt. Premier Wen Jibao has recently warned of prospects for devaluation of major currencies undermined by government and central banks spending powers in response to the financial crisis.

According to government data the Chinese have stepped up the volume of iron ore and copper along with petroleum by way more than the country needs. The aim of the plan is to hold assets whose prices would rise should the dollar fall. Remember that the dollar and commodity prices tend to move in opposite directions and this plan, if indeed the speculation is right, is a logical and practical defense against dollar weakness. At the same time the stockpiling argument does run into difficulties. You can't eternally store energy products. According to the story, the Chinese have lifted their petroleum reservoir from an estimated 30-day supply to a 100-day supply. For other metals, they could conceivably store entire hillsides if they wanted to and become commodity supplier to the world should they choose to.

The big idea coming out of this theory though is that Chinese stockpiling is actually masking the revival of the economy. The Aussie and Canadian dollars are both higher against the greenback today on the view that strong commodity demand will benefit their currencies and economies. The reality is that this false demand ultimately falls flat if such resources aren't put into production. Talk about digging holes to create employment springs to mind.

In England house prices rose at a 2.4% pace in the month to May according to Rightmove. That's the largest single monthly increase in home prices since February 2008 while the number of new listings fell to its lowest since May 2003 as falling prices put home owners off selling their homes. Some people see this news as the beginning of the revival of the housing market. Lately the RICS survey showed the highest level of home inquiries since 1999. But according to data from Lloyds TSB Bank's Halifax division, the former building society and mortgage lender, the annual price slump through March of 17.6% will leave 1.8 million or 15% of outstanding mortgages with negative equity before the end of 2010.

Anyway, the pound is higher this morning against the dollar on the back of today's news and buys $1.5280. Against the pound one euro today buys 88.20 pennies. The euro is a little lower against the dollar at $1.3480 as investors grapple with news last week of a 2.5% plunge in GDP growth. The ongoing wrangling and bickering over the scope of asset purchases by the ECB is becoming an accepted risk of holding euros and it does not feel as though this argument will hold the euro back in value for long, especially if the bleakest hour for Europe is now firmly behind it. However, don't make any big plans just yet on that front!