The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥88.05 level and was capped around the ¥89.55 level. As expected, government and Bank of Japan officials ratcheted up the verbal intervention overnight. BoJ Governor Shirakawa warned I don't like to comment on the background behind currency rate trends. I'll refrain from commenting, given any effects it might cause. I'm always closely watching effects from a rise in the yen and fluctuations in currency rates. That's the conclusion. A strong yen will have big impact on Japanese exporters in the near term, which has been one factor behind a worsening of the underlying economy. Looking at the medium to long term on the other hand, a strong yen will bring about other effects. Until last summer, everyone was talking about a deteriorating economy caused by a worsening of terms of trade due to a rise in crude oil prices. A strong yen has effects that somewhat improve terms of trade, and such effects will materialize in the long run. It also has positive impacts on Japanese firms' profits when they carry out various mergers and acquisitions and direct investment overseas. As to how the short-term downside factors and positive effects (from a strong yen) will play out, I'll keep a close watch, as the economy won't be determined by currencies alone but also by overall economic conditions. BoJ’s Policy Board kept the overnight call rate unchanged at 0.10% and announced it will purchase corporate bonds and accept Real Estate Investment Trust debt as collateral to ease funding strains. The central bank made it clear it will assume new credit risks to try and limit economic damage. BOJ also warned core consumer prices will fall 1.1% in the year through March 2010 and 0.4% in the year to March 2011. The central bank also sees the economy contracting 1.8% in the current fiscal year to March and 2.0% in the year to March 2010. MoF chief Nakagawa reported Rapid moves are not good, so I am watching the moves carefully. I should not comment on it. But we should always be thinking about doing what may be necessary. Data released in Japan overnight saw December exports plunge a record 35% y/y. Government officials verbally intervened against the yen en masse. MoF’s Sugimoto reported Excessive volatility in the currency market could have a negative impact to the economy; therefore, it is not desirable. The Nikkei 225 stock index gained 1.90% to close at ¥8,051.74. 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 ¥113.95 level and was capped around the ¥116.80 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥121.10 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥76.15 level. In Chinese news, U.S. Treasury Secretary nominee Geithner said China is manipulating the yuan currency and called for heavy engagement with China. He added a strong dollar is in America’s interest. Data released in China today saw 2008 GDP growth of 9.0% and Q4 GDP growth slowed to 6.8% y/y. Also, December industrial output was up 5.7% and December retail sales were up 19% y/y.