The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥108.20 level and was supported around the ¥107.45 level. Technically, today’s intraday high and low were right around the 61.8% and 50.0% retracements of the move from ¥110.10 to ¥104.95, respectively. The Nikkei reported the Japanese government will lower its assessment of the Japanese economy for the first time in fifteen months in February on account of weaker exports and a production slowdown. Minutes from Bank of Japan’s January Policy Board meeting were released overnight and policymakers noted they’ll pay closer attention to downside U.S. risks such as the housing sector and credit market turmoil. Most traders expect the BoJ will keep the overnight call rate unchanged at 0.50% for the foreseeable future, especially as policymakers agreed to maintain the basic thinking on monetary policy for the future. Data released in Japan overnight saw January convenience store sales fall 1.6% y/y. The Nikkei 225 stock index came off 3.25% to close at ¥13,310.37. Dollar bids are cited around the ¥106.90 level. The euro weakened vis-à-vis the yen as the single currency tested bids around the ¥157.70 level and was capped around the ¥159.25 level. The British pound and Swiss franc moved lower vis-à-vis the yen as the crosses tested bids around the ¥209.10 and ¥97.95 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.1436 in the over-the-counter market, down from CNY 7.1580. The Chinese media reported consumer price inflation is likely to decelerate in H2 2008.