The yen appreciated vis-Ã -vis the U.S. dollar today as the greenback tested bids around the Â¥105.75 level and was capped around the Â¥106.70 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move from Â¥104.95 to 107.85. Risk aversion increased after the weakest U.S. payrolls data in years were released. There is less incentive for traders and investors to borrow yen via short yen carry trades and invest the proceeds in overseas markets, particularly with U.S. equity markets on the defensive. There are some rumblings that Bank of Japanâ€™s Policy Board may reduce interest rates this year but the consensus view calls for continuity in the current 0.50% overnight call rate. The Nikkei 225 stock index lost 0.70% to close at Â¥13,497.16. Dollar bids are cited around the Â¥105.65/ 104.95 levels. The euro weakened vis-Ã -vis the yen as the single currency tested bids around the Â¥157.15 level and was capped around the Â¥158.85 level. The British pound and Swiss franc came off vis-Ã -vis the yen as the crosses tested bids around the Â¥208.95 and Â¥98.05 levels, respectively. The Chinese yuan depreciated vis-Ã -vis the U.S. dollar as the greenback closed at CNY 7.1890 in the over-the-counter market, up from CNY 7.1818. Data released in China overnight saw CLSA January PMI fall to 53.2 from 53.3. PBoC Vice Governor Yi Gang suggested China may continue to impose more interest rate and reserve ratio hikes.
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