The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥106.85 level and was supported around the ¥105.70 level. Technically, today’s intraday high and low were right around the 38.2% and 76.4% retracements of the move from ¥104.95 to ¥107.90. The yen was pressured overnight on comments from Bank of Japan Policy Board member Nishimura who reported If risk factors, such as downside risks for the global economy, materialize, it is natural for us to consider taking flexible action on the basis of developments in the economy and prices. Nishimura seemingly ruled out an imminent rate cut but added We will take policy actions in a timely manner to achieve sustainable economic growth with price stability. His remarks partially followed those of BoJ Governor Fukui who this week suggested the global economic slowdown is impacting Japan. These collective remarks are yen-negative because they suggest interest rates could be reduced and encourage more short yen carry trades. Data released in Japan overnight saw December construction orders up 4.7% y/y while December housing starts were off 19.2% y/y. The Nikkei 225 stock index gained 1.85% to close at ¥13,592.47. Dollar bids are cited around the ¥104.20 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥158.70 level and was supported around the ¥156.70 level. The British pound and Swiss franc rallied vis-à-vis the yen as the crosses tested offers around the ¥212.25 and ¥98.55 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.1818 in the over-the-counter market, down from CNY 7.1916 – the pair’s lowest close since the yuan revaluation of July 2005. Data released in China today saw Q4 property prices up 10.2% y/y in 70 major cities while January consumer price inflation jumped 6.5% y/y.