The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.50 level and was capped around the ¥91.35 level. The yen rampaged across the board as the Group of Twenty meeting remained underway in Pittsburgh. Japanese finance minister Fujii met with U.S. Treasury Secretary Geithner last night and reported he is opposed to intentionally devaluing the yen or other currencies. This admission gave the yen a clear path to appreciate. Former MoF mouthpiece Mr Yen Sakakibara reported the government may not intervene even if the pair falls as low as ¥90. Fujii and the government may only decide to intervene if exchange rate imbalances become abnormal. Data released in Japan overnight saw the August corporate service price index printed at 92.2, off 0.4% m/m and 3.5% y/y. 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 0.34625, the lowest level since June 2006. Similarly, U.S. dollar three-month Libor printed at a record low of 0.28250. 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. The Nikkei 225 stock index lost 2.64% to close at ¥10,265.98. 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 ¥131.55 level and was capped around the ¥133.85 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥142.75 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.15 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8235 in the over-the-counter market, up from CNY 6.8218. People's Bank of China Deputy Governor Hu this week 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. PBoC official Xie Duo reported it is closely watching the direction and trend of the U.S. dollar.