The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.05 level and was supported around the ¥88.70 level. Minutes from Bank of Japan’s Policy Board meeting were released overnight and some policymakers said a further decrease in the current 0.1% overnight call rate should not be ruled out. Other policymakers opposed the decrease to 0.1% and argued the emphasis on policy should be geared to longer-term rates and improving corporate financing. The Japanese government enacted a US$ 53 billion extra budget today to finance the government’s stimulus plans. Prime Minister Aso will speak in Parliament tomorrow and is facing intense political pressure ahead of the election that must be held by October. The government also announced it will purchase shares in companies that have serious capital problems as a result of the financial crisis. Data released in Japan overnight saw December corporate service prices off 0.5% m/m and 2.5% y/y. The Nikkei 225 stock index climbed 4.93% to close at ¥8,061.07. 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 ¥116.10 level and was capped around the ¥119.45 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥127.65 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥124.25 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8392 in the over-the-counter market.
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