The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥88.60 level and was capped around the ¥89.95 level. The pair reached its lowest level since 19 December as traders’ risk aversion increased following volatility on Wall Street. Citigroup and Morgan Stanley reached a deal to combine their brokerage units and analysts believe Citigroup may be forced to sell off additional assets, possibly creating a good bank and a bad bank, the latter of which would hold toxic or underperforming assets. Bank of Japan’s Policy Board will convene on 21-22 January and is expected to announce additional plans to enhance liquidity to the corporate sector. The Nikkei 225 stock index climbed 0.29% to close at ¥8,438.45. 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 ¥117.70 level and was capped around the ¥119.55 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥129.70 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥79.30 level. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8352 in the over-the-counter market, up from CNY 6.8341. The government upwardly revised its 2007 GDP growth figure to 13.0% from 11.9%. 2008 GDP growth data will be released next week.
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