The yen appreciated vis--vis the U.S. dollar today as the greenback tested bids around the 101.75 level and was capped around the 102.80 level. As expected, Japans Diet accepted the nomination of Bank of Japan Deputy Governor Shirakawa as the next Governor of the central bank. Shirakawa, who has been the acting governor for a couple of weeks following the retirement of former BoJ Governor Fukui, has a hawkish reputation. Following the central banks decision to keep the overnight call rate unchanged at 0.50%, Shirakawa noted the Japanese economy said uncertainties surrounding the Japanese economy are now high. It may be an exaggeration to describe the current financial environment in the U.S. as being as bad as the one during the Great Depression. But the current situation is unprecedented in the post-World War II period anyway. He added it will take some time before the ongoing correction in the global financial and capital markets is completed. The central bank downgraded its overall economic assessment in its April monthly report on account of escalating energy prices and higher raw materials. Notably, the central bank did not use the word expansion in its monthly assessment for the first time since June 2006. Data released in Japan overnight saw March machine tool orders rise 2.9% y/y. The Nikkei 225 stock index lost 1.05% to close at 13,111.89. Dollar offers are cited around the 103.65 level. The euro came off vis--vis the yen as the single currency tested bids around the 160.60 level and was capped around the 161.45 level. The British pound moved lower vis--vis the yen as sterling tested bids around the 200.70 level while the Swiss franc gained ground vis--vis the yen and tested offers around the 101.75 level. The Chinese yuan depreciated vis--vis the U.S. dollar as the greenback closed at CNY 7.0017 in the over-the-counter market, up from CNY 7.0008.
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