The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥100.00 figure and was capped around the ¥101.05 level. Traders assumed more market risk after the long Easter weekend holiday and the U.S. dollar was given across the board. Bank of Japan Deputy Governor Shirakawa – the acting BoJ Governor – today said (Japan’s economy) is now facing many risks from both within and outside the country, such as the global financial market instability caused by the U.S. subprime loan issues and dwindling profits of Japan's mid- and small-sized companies. In making policy, the BOJ must analyze these risks broadly, and also take into considerations the mid- and long-term economic conditions, as well as the current ones. Shirakawa touched on exchange rates saying The recent volatility is reflecting the process of adjustments and risk-reassessment in the international financial market. It may take some time. Some traders believe the central bank will be forced to reduce interest rates this year. Finance minister Nukaga said Japan’s economy recovery seems to be pausing, a contrast to the government’s statement in February that the economy is recovering at a moderate pace. The Nikkei 225 stock index climbed 2.12% to close at ¥12,745.22. Dollar offers are cited around the ¥102.05 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥156.75 level and was supported around the ¥155.10 level. The British pound weakened vis-à-vis the yen as sterling tested bids around the ¥199.25 level and was capped around the ¥200.90 level while the Swiss franc moved higher vis-à-vis the yen as the pair tested offers around the ¥99.50 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.0448 in the over-the-counter market, down from CNY 7.0555, the pair’s weakest close since the yuan revaluation of July 2005.