The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥105.00 figure and was capped around the ¥106.45 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥102.65 to ¥108.55. Traders await tonight’s Bank of Japan Tankan corporate sentiment survey tonight with most anticipating a further decline in corporate sentiment. The yen reversed course and appreciated overnight after Moody’s Investors Service raised its credit rating on yen-denominated Japanese government bonds to Aa3 from A1, raising demand for yen. The Japanese government confirmed it did not officially intervene in the foreign exchange markets this month. Data released in Japan overnight saw May housing starts fall 6.5% y/y while May construction orders were off 25.2% y/y. The Nikkei 225 stock index lost 0.46% to close at ¥14,481.38. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro weakened vis-à-vis the yen as the single currency tested bids around the ¥166.10 level and was capped around the ¥168.10 level. The British pound and Swiss franc depreciated vis-à-vis the yen as the crosses tested bids around the ¥209.40 and ¥103.45 level, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8543 in the over-the-counter market, down from CNY 6.8622 and the pair’s lowest close since the yuan revaluation of July 2005. People’s Bank of China Governor Zhou reported We have several choices of using monetary policy, including open market operations, central bank bills, reserve requirements, interest rates, and the others.
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