The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥87.40 level and was capped around the ¥88.65 level.  The pair came within about 25 pips of testing a year-long low.  Bids from semi-official names - possible overt intervention - were cited overnight but they have done little to stop this latest round of extreme dollar-selling.  There was massive verbal intervention overnight by Japanese monetary authorities.  Finance minister Fujii reported China's currency is clearly undervalued and said the yuan's dollar peg is not necessarily good. Bank of Japan Deputy Governor Yamaguchi reported The global economy is improving, supported by fiscal and monetary measures.  Balance sheets of U.S. and European lenders are still deteriorating and their adjustment will take more time.  The global financial system still remains fragile.  Data released in Japan overnight saw the October corporate service price index climb +0.1% m/m and decline 2.2% y/y.  Also, the October trade surplus printed at ¥807.1 billion.   Bank of Japan yesterday upgraded its economic assessment for the third consecutive month, noting the economy is picking up...Japan's economic conditions are likely to continue improving, although the pace of improvement is likely to remain moderate for the time being.  Notably, the central bank reported the decline in business investment is decelerating and private consumption is improving.  Core consumer price inflation data will be released later this week and are likely to show the October reading was off 2.2% y/y.  There is increasing speculation BoJ will actually expand its quantitative easing policies by increasing its debt purchases.  Most BoJ-watchers believe the central bank will keep interest rates unchanged through at least most of 2010.  BoJ's Policy Board recently predicted core consumer prices will decline 1.5% in the year ending March 2010, decline 0.8% in the fiscal year ending March 2011, and decline 0.4% in the fiscal year ending March 2012.  The Nikkei 225 stock index climbed 0.43% to close at ¥9,441.64.  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 ¥131.50 level and was capped around the ¥132.70 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥145.80 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 appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8290 in the over-the-counter market, up from CNY 6.8260.  People's Bank of China Deputy Governor reported the yuan will become a more attractive currency and added the central bank will increase surveillance of hot money flows. Vice Foreign Minister Zhang Zhijun yesterday said China will increase the flexibility of the yuan exchange rate while maintaining stability in the market, adding the increase will be incremental and balanced.  Zhang added China is moving toward a system that is market-based and is a managed floating mechanism with respect to a basket of currencies. Chinese Premier Wen Jiabao will meet European Central Bank President Trichet and Ecofin head Juncker on 29 November.  China's banking regulator informed Chinese lenders they must comply with capital requirements or risk sanctions. There is increasing speculation China will strengthen its strict capital requirements.  Vietnam devalued its dong currency overnight for the third time in two years - the opposite direction that global policymakers want to see Asian currencies moving in.