The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.70 level and was supported around the ¥89.20 level. Bank of Japan official Watanabe reported the central bank will keep monetary policy very accommodative. The government reported it will not hold regular meetings with the BoJ to exchange views on the economy and financial conditions. BoJ Governor Shirakawa reported the central bank's policies remain conducive to the economic recovery. As expected, Bank of Japan last week reported it will stop purchasing corporate debt at the end of 2009, a move designed to phase out one of the emergency measures it adopted as part of its quantitative easing policies. The central bank also indicated it will only renew one additional emergency program one final time through 31 March. Additionally, the central bank now expects deflation will continue for a third year with core consumer prices expected to decline 1.5% in the fiscal year ending March 2010 and the 0.8% in the fiscal year ending March 2011. The Nikkei 225 stock index lost 2.31% to close at ¥9,802.95. 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 ¥134.50 level and was supported around the ¥131.00 figure. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥145.75 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥89.10 level. In Chinese news, the U.S. dollar strengthened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8214 in the over-the-counter market, up from CNY 6.8210. The Chinese media reported People's Bank of China is likely to adopt a tighter monetary policy. PBoC Governor Zhou on Friday reported the central bank should maintain a moderate easy monetary policy. Data released in China overnight saw October manufacturing expanded at its fastest pace in eighteen months and eighth consecutive month with the CFLP Purchasing Managers' Index rallying to 55.2 from 54.3 in September.
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