The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥97.10 level and was capped around the ¥98.60 level. The yen snapped back overnight as risk appetite at month’s end withered. There is a growing perception the Aso government is trying to engineer a weaker yen to contend with Japan’s beleaguered economy and some U.S. legislators are already verbally intervening against this perceived policy response. Data released in Japan overnight were quite weak. First, January overall housing starts were off 18.7% y/y. Second, January construction orders were off 38.3% y/y to ¥578.9 billion. Third, January industrial production was off 10.0% m/m and 30.8% y/y, underscoring the extremely weak condition of the manufacturing sector. Fourth, January overall retail sales were off 2.4% y/y. Fifth, the January jobless rate printed at 4.1%, down from 4.4% in December. Sixth, January all household spending was off 5.9% y/y. Seventh, the January core consumer price index was unchanged y/y, the weakest print in sixteen months and the latest evidence that deflation may be materializing. Core CPI for the Tokyo area rose a provisional 0.6% in February. The Nikkei 225 stock index climbed 1.48% to close at ¥7,568.42. 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 ¥122.65 level and was capped around the ¥125.50 level. The British pound moved higher vis-à-vis the yen as sterling tested bids around the ¥137.35 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥82.70 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8405 in the over-the-counter market, up from CNY 6.8361.