The yen appreciated marginally vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.90 level and was capped around the ¥92.40 level. Traders are paying close attention to the political situation in Japan where more than half of Japanese voters are said to favour the opposition Democratic Party to replace the Liberal Democratic Party and embattled Prime Minister Aso. Economics minister Yosano yesterday said the government may need to consider more fiscal spending to support the economy above the current stimulus program. Data released in Japan overnight saw preliminary December machine tool orders off 1.7% m/m and 84.4% y/y. Also, January corporate bankruptcies were up 16%, a six-year high, while January bank lending rose 3.7% y/y. Data to be released next week are likely to show Japan’s economy shrank at its fastest pace since 1974 in the final three months of 2008. Additional data released overnight saw the January Economy Watchers Survey print at 17.1, up from December’s all-time-low of 15.9. The Nikkei 225 stock index lost 1.33% to close at ¥7,969.03. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥120.00 level and was supported around the ¥117.05 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥137.30 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥78.05 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8392 in the over-the-counter market, up from CNY 6.8334. The government reported A slowing economy has dented residential income growth as well as consumer expectations. Some consumption hot spots are starting to cool off. Data released in China today saw January producer price inflation off 1.3% m/m.
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