The yen depreciated vis--vis the U.S. dollar today as the greenback tested offers around the 102.70 level and was supported around the 101.70 level. Traders dumped the yen across the board on a news report out of London that the British Bankers Association is investigating whether or not banks that set the fixing price of Libor have kept rates artificially low to mask demand for interbank liquidity. The evaluation of fixing practices may result in higher market interest rates and this could result in greater demand for overseas yield opportunities by Japanese accounts. Also, some U.S. companies have been posting higher-than-expected earnings results this week and this has led to additional demand from Japanese investors. Data released in Japan overnight saw February industrial output climb 1.6% m/m. The Nikkei 225 stock index climbed 1.92% to close at 13,398.30. Dollar offers are cited around the 103.65 level. The euro moved higher vis--vis the yen as the single currency tested offers around the 163.20 level and was supported around the 162.15 level. The British pound and Swiss franc gained ground vis--vis the yen as the crosses tested offers around the 203.35 and 102.25 levels, respectively. The Chinese yuan appreciated sharply vis--vis the U.S. dollar as the greenback closed at CNY 6.9838 in the over-the-counter market, down from CNY 6.9918, the pairs lowest close since the yuan revaluation of July 2005.
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