The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥105.75 level and was capped around the ¥106.75 level. Nikkei reported Bank of Japan is expected to reduce its economic assessment for the current fiscal year to March 2009 on account of a decelerating economy and escalating prices. BoJ’s Policy Board will convene on 14-15 July and will also release its semi-annual outlook on the economy and prices and is likely to highlight downside risks to current projections. The BoJ is also expected to acknowledge prices may continue higher. Data released in Japan overnight saw the June monetary base up 0.4% y/y. The Nikkei 225 stock index lost 1.31% to close at ¥13,286.37. 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 ¥168.60 level and was supported around the ¥167.30 level. The British pound came off vis-à-vis the yen as sterling tested bids around the ¥210.80 level and was capped around the ¥212.05 level. The Swiss franc moved higher vis-à-vis the yen as the pair tested offers around the ¥104.55 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8530 in the over-the-counter market, down from CNY 6.8567 and the pair’s lowest close since the yuan revaluation of July 2005. Data released in China overnight saw the May consumer confidence index rise to 94.3 from 94.0 in April.
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