The yen appreciated marginally vis-à-vis the U.S. dollar today as the greenback tested bids around the Â¥94.40 level and was capped around the Â¥95.20 level. There was little market reaction to news that North Korea conducted a large nuclear test in the northeastern part of that country and test-fired three short-range missiles. This represented the country€™s first nuclear test in three years. The Japanese government has promised €œdecisive measures€ in response to today€™s activities by North Korea. Japan€™s proximity to North Korea and alliance with the U.S. render the yen susceptible to geopolitical forces resulting from North Korea€™s activities. The Japanese government and Bank of Japan raised their overall economic assessments in May today for the first time since 2006, reporting exports and industrial production appear to be bottoming. €œWhile the economy is in a difficult situation, the tempo of worsening has become moderate,€ the government reported in stark contrast to April€™s statement that it sees the economy €˜worsening rapidly while in a severe situation.€ Similarly, Bank of Japan today reported €œThe pace of deterioration in Japan's economic conditions is likely to moderate gradually, leading to a leveling out of the economy.€ Despite the government€™s upgrade in its assessment, it added the word €œsevere€ to characterize the labour market. Japan€™s jobless rate was 4.8% in March and some economists believe it could reach 5.5% in the coming months. On Friday, BoJ Governor Shirakawa reported Japan will register positive gross domestic product growth in the April € June quarter. Finance minister Yosano reported €œmany downside risks remain.€ The Nikkei 225 yesterday stock index climbed 1.31% to close at Â¥9,347.00. U.S. dollar offers are cited around the Â¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the Â¥133.40 level and was supported around the Â¥132.05 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the Â¥149.80 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the Â¥87.80 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8265 in the over-the-counter market, up from CNY 6.8255. Chinese President Hu Jintao and Brazilian President Lula suggested bilateral trades should be settled in different currencies other than the U.S. dollar.