The yen appreciated vis-Ã -vis the U.S. dollar today as the greenback tested bids around the Â¥102.60 level and was capped around the Â¥103.60 level. The pair reached its lowest level since January 2005 and elicited some verbal intervention from Japanese officials. Prime Minister Fukuda reported too sharp forex moves are not good. I am carefully watching exchange rates. Vice finance minister Tsuda said the MoF will carefully monitor daily moves while finance minister Nukaga declined comment. The pair is within striking distance of parity and many traders believe it is only a matter of time before the psychologically-important Â¥100.00 figure is tested. Traders are split, however, as to whether Japanese monetary authorities will intervene by selling yen. Most traders believe Bank of Japan will keep the overnight call rate unchanged at 0.50% for the foreseeable future. The Nikkei 225 stock index lost 4.49% to close at Â¥12,992.18. Dollar bids are cited around the Â¥101.20 level. The euro weakened vis-Ã -vis the yen as the single currency tested bids around the Â¥155.95 level and was capped around the Â¥157.45 level. The British pound and Swiss franc moved lower vis-Ã -vis the yen as the crosses tested bids around the Â¥203.45 and Â¥98.80 levels, respectively. The Chinese yuan appreciated vis-Ã -vis the U.S. dollar as the greenback closed at CNY 7.1041 in the over-the-counter market, down from CNY 7.1115, the pairâ€™s lowest close since the yuan revaluation of July 2005. Data released in China overnight saw CLSA February PMI fall to 52.8 while CFLP February PMI improved to 53.4.
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