The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥91.55 level and was supported around the ¥90.90 level. Bank of Japan Governor Yamaguchi reported that maintaining emergency credit programs for a long time...may hurt an autonomous recovery of market functions and invite the distortion of the allocation of resources. He added, however, that a positive mechanism has started to take hold in the Japanese economy. The central bank voted to keep monetary policy unchanged last night and upgraded its assessment of the economy. New finance minister Fujii verbally intervened saying exchange rates should be determined by the state of a nation's economy. His comments suggest the new Democratic Party of Japan government may not be inclined to sell the yen through actual intervention. In contrast, former finance minister Yosano said his government had unshakable support for the U.S.'s strong dollar policy. The Japanese government has not officially intervened in the markets since March 2004. As expected, Bank of Japan yesterday upgraded its assessment of the Japanese economy and noted the economy is showing signs of recovery. The Nikkei 225 stock index lost 0.70% to close at ¥10,370.54. U.S. dollar offers are cited around the ¥94.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥134.45 level and was supported around the ¥133.70 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥148.25 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.80 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8291 in the over-the-counter market, up from CNY 6.8200. This week's U.S. TICS investment flows data revealed China was a net buyer of U.S. government assets last month. People's Bank of China reported it has kept the yuan stable vis-à-vis the U.S. dollar to promote regional stability. PBoC also reported the Australian dollar is a shadow currency of the yuan.