The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥108.05 level and was supported around the ¥107.65 level. Traders continued to buy U.S. dollars ahead of today’s interest rate decision from the Federal Open Market Committee. Technically, today’s intraday low was right around the 38.2% retracement of the move from ¥108.55 to ¥107.10. Data released in Japan today saw the May merchandise trade surplus shrink for the third consecutive month, printing at ¥365.61 billion and off 7.6% y/y. Traders are curious to see how these data impact the April – June GDP data that are due in early August. Other data released last night saw the May corporate services price index climb +0.2% m/m and 0.6% y/y, the eighteenth consecutive monthly increase. The Nikkei 225 stock index lost 0.14% to close at ¥13,829.92. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥168.45 level and was supported around the ¥167.60 level. The British pound and Swiss franc appreciated vis-à-vis the yen as the crosses tested offers around the ¥213.20 and ¥103.95 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8653 in the over-the-counter market, down from CNY 6.8699 and the pair’s lowest close since the yuan revaluation of July 2005. It was reported that China’s foreign reserves totaled US$ 1.76 trillion at the end of April.
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