The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥91.80 level and was supported around the ¥91.50 level. Bank of Japan gave the government permission to refinance for a second time some ¥2 trillion of the ¥7.7 trillion in bonds that the government rolled over into treasury bills this year. Data released in Japan yesterday saw November industrial output up 2.6% m/m while November overall retail sales were off 1.0% y/y. Japan, China, Hong Kong, Korea, and other Asian countries agreed on a new US$ 120 billion measure yesterday to address balance of payments and short-term liquidity difficulties in the region. Last week, finance minister Fujii reported Japan has depleted most of its special account funds and added it is difficult to compile a budget for fiscal year 2010. Fujii added monetary policy has been helpful in boosting the economy and that capital spending remains the worst part of the economy. Japanese government bonds sales are expected to reach a record ¥144.3 trillion. Minutes from Bank of Japan's latest Policy Board meeting were released last week in which the government asked the central bank to monitor deflation. The minutes revealed many Policy Board members agreed the bank would maintain its stance of responding promptly to changes in the market situation. Policymakers said the central bank would adopt the most effective method for money-market operations that conformed to changes in financial markets. After an emergency meeting on 1 December, the central bank introduced a ¥10 trillion fixed-rate lending facility that was designed to arrest the yen's advances and counter deflation. The central bank also characterized the most recent bout of deflation as mild. The Nikkei 225 stock index lost 0.04% to close at ¥10,638.06. 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 ¥132.60 level and was supported around the ¥131.65 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥147.10 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥89.20 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8292 in the over-the-counter market, down from CNY 6.8302. Prime Minister Wen reported China's export markets are facing big pressures and added the outlook for shipments next year isn't optimistic. Wen also said policymakers must manage people's expectations regarding price increases. People's Bank of China adviser yesterday Fan Gang said the yuan should not depreciate in the long-term but cited a risk the yuan may depreciate in the short term. Fan added China's GDP growth rate may be between 8% and 9% in 2010 and said export growth could reach double digits in 2010.