The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.85 level and was capped around the ¥92.90 level. Bank of Japan Governor Shirakawa testified that recent central bank actions have helped the economy, reporting The markets are already reacting. The environment for issuance of commercial paper is improving somewhat after the BOJ's decision to buy commercial paper. BoJ’s Policy Board is expected to keep interest rates unchanged at its 21-22 January meeting but it may expand policy by broadening the types of assets it accepts for corporate financing. Nikkei reported the government now expects its budget deficit for the year to March 2012 will reach more than 2% of GDP. Prime Minister Aso testified and verbally intervened today saying We need to consider maintaining our support for the dollar as a key currency for the time being, otherwise our national interest would be hurt. The Nikkei 225 stock index lost 3.93% to close at ¥8,876.42. U.S. dollar offers are cited around the ¥104.15 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥124.10 level and was capped around the ¥126.50 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥137.25 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥82.90 level. The Chinese yuan weakened vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8352 in the over-the-counter market, up from CNY 6.8330.
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