The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.35 level and was capped around the ¥90.40 level. Traders are talking about rumours that Bank of Japan will decide as early as October to let its corporate debt purchase programs expire. The central bank has been supporting the corporate bond and commercial paper market and the emergency purchase programs are schedule to expire at the end of December. BoJ officials are concerned the continuation of these programs could distort the proper functioning of the markets. Recently, on 18 September, BoJ found no lenders that were offering to sell commercial paper to the central bank. BoJ will release its quarterly Tankan survey of business sentiment overnight and it is expected to evidence an improvement in business confidence. BoJ's Policy Board convenes on 14 October and 30 October and will publish its twice-yearly economic growth and inflation forecasts at the latter. Finance minister Fukii reported he will not discuss currencies at the Group of Seven meeting in Istanbul this weekend. Data released in Japan overnight saw August construction orders decline 25.2% y/y while August overall housing starts were off 38.3% y/y. Additionally, August industrial output was up 1.8% m/m and manufacturing PMI rose to 54.5. Dealers continue to cite continued yen repatriation flows even on the last day of Japan's fiscal year-end. The Nikkei 225 stock index climbed 0.33% to close at ¥10,133.23. 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 ¥130.60 level and was capped around the ¥132.00 figure. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥142.85 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥85.90 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8244 in the over-the-counter market, up from CNY 6.8230. People's Bank of China reported it will continue its moderately easy monetary policy while highlighting the role of domestic consumption in pushing the economy. Chinese financial markets will be closed from 1 October through 8 October for the National Day's holiday. Some banks are predicting China will register consumer price inflation growth in November. Some PBoC-watchers believe the central bank is not doing enough to prevent an asset bubble.
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