The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.35 level and was supported around the ¥91.60 level. Bank of Japan announced it will extend liquidity provision measures through January 2010 to cushion money markets in concert with other central banks. Yen borrowing costs declined to a three-year low with three-month Libor at 0.34750, the lowest level since June 2006. Similarly, U.S. dollar three-month Libor printed at a record low of 0.28500. U.S. dollar rates have been below Japanese dollar rates since 24 August and that has resulted in the U.S. dollar being used as a carry trade funding currency. Data released in Japanese overnight saw the July all industry activity index climb 0.5% with industrial production up 2.1% m/m and the tertiary index up 0.6% m/m. Additionally, the August trade surplus came in stronger-than-expected at ¥187.5 billion. The Nikkei 225 stock index gained 1.67% to close at ¥10,544.22. U.S. dollar offers are cited around the ¥94.75 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥133.35 level and was capped around the ¥134.65 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥146.30 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.15 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8218 in the over-the-counter market, down from CNY 6.8256. People's Bank of China Deputy Governor Hu yesterday reported G20 nations should consider establishing an international wealth fund to invest a portion of members' current account surpluses. There is continued speculation among dealers that Chinese monetary authorities may allow the yuan to appreciate further vis-à-vis the U.S. dollar.