The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥88.80 level and was capped around the ¥90.00 figure. The yen gained ground despite Friday’s data that reinforced the notion the Japanese economy is heading deeper into a recession. It was reported then that December industrial output was off a record 9.6%. Bank of Japan purchased ¥430 billion of Japanese government bonds overnight in its latest attempt to keep longer-term interest rates low. The Nikkei 225 stock index lost 1.50% to close at ¥7,873.98. 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 ¥113.15 level and was capped around the ¥115.55 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥125.30 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥76.15 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8490 in the over-the-counter market, up from CNY 6.8405. Prime Minister Wen said the government must provide very strong and effective fiscal stimuli to counter the recession. Data released in China overnight saw the CLSA January PMI manufacturing survey improve to 42.2 from 41.2 in December.
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