The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥92.10 level and was capped around the ¥93.05 level. The pair reached a seven-week low as traders reacted to a worse-than-expected U.S. private sector jobs report. Risk aversion remains strong with the VIX index - a measure of stock market volatility - at its highest level since 10 July. Bank of Japan Governor will attend the Group of Twenty meeting in London this week followed by the Bank for International Settlements meeting in Basel. Democratic Party of Japan legislator Kohei Otsuka said the new DPJ government won't meddle in the central bank's monetary policy and market operations and added the new government will respond appropriately to excessive currency moves. Data released in Japan overnight saw the August monetary base climb 6.1% y/y. The Nikkei 225 stock lost 2.02% to close at ¥10,280.46. U.S. dollar offers are cited around the ¥94.75 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥131.00 figure and was capped around the ¥132.50 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥149.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.40 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8273 in the over-the-counter market, up from CNY 6.8257. China announced today that it plans to purchase US$ 50 billion in International Monetary Funds bonds. Chinese benchmark money rates rose by the most in one month on speculation that demand for capital will increase ahead of Metallurgical Corp. of China Ltd's first share issuance next week. Data released in China yesterday saw the August Purchasing Managers' Index improve to 54. China is experiencing its worst export slump in more than two decades and some economists are predicting China's US$585 billion stimulus could lead to a surge in Chinese imports in the fourth quarter.
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