The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.10 level and was capped around the ¥90.95 level. The Japanese government warned the economy is worsening rapidly and downgraded its economic assessment for the fourth time in as many months. The downgraded was precipitated by weak consumption and sharp declines in production and exports. Data released in Japan today saw December consumer confidence fall to 26.7, the lowest level since 1982. One government official noted the economy is deteriorating at an unprecedented pace. Data to be released on Thursday are likely to show exports declined as much as 30% y/y in December. Other data saw December machine tool orders off 28.7% m/m and 71.8% y/y. Additionally, the November tertiary sector index was off 0.9% m/m. Bank of Japan’s Policy Board will announce the results from its meeting this week and is likely to announce new measures to provide liquidity to the beleaguered corporate sector. BoJ today offered an unlimited amount of funds in a special money market operation to support corporate financing. The Nikkei 225 stock index lost 2.31% to close at ¥8.065.79. 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 ¥116.60 level and was capped around the ¥118.80 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥125.25 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥78.80 level. In Chinese news, China will release 2008 GDP data on Thursday and economic growth may have slowed to 7.0% last year, the weakest pace in nine years. Data released in China today the December urban jobless rate rise to 4.2%.