The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.85 level and was supported around the ¥90.55 level.  Traders await Bank of Japan Policy Board's interest rate decision tomorrow night with strong expectations of additional monetary easing.  The central bank may expand a ¥10 trillion fund that provides funding to banks when policymakers convene on 16-17 March and this is important because an unlimited uncollateralized loan facility expires on 31 March.  The central bank remains under significant pressure to do more to combat the deflation problem further.  BoJ Governor Shirakawa and other Policy Board members have recently indicated deflationary pressures are persisting because there is insufficient final private demand.  Shirakawa overnight said he is not against inflation targeting and said the central bank should not make policy based on short term price movements.  He also said that additional Japanese government bond purchases would mean the central bank will sell them eventually. Concerning the yen, Shirakawa said the central bank's accommodative policy is impacting the yen and proper action needs to be taken.  It appears the Hatoyama government is becoming increasingly concerned with the yen's strength and there is growing speculation the government may begin to officially intervene in the market, especially as the government increased the size of the funding it has available for intervention in its draft budget.  Data released in Japan overnight saw February consumer confidence improve to 40.0 while February Tokyo-area condominium sales climb 10.7% y/y.  Machine tool orders and tertiary index data will be released tomorrow.  The Nikkei 225 stock index climbed 0.01% to close at ¥10,751.98.  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 ¥124.25 level and was capped around the ¥125.15 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥136.10 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.85 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8262 in the over-the-counter market, up from CNY 6.8256.  Data released in China overnight saw February actual foreign direct investment decrease to +1.08% from the prior reading of +7.80%.  Premier Wen Jinbao reported the yuan is not undervalued.  Chinese and U.S. tensions are definitely increasing and it remains to be seen how quickly China may liberalize its yuan exchange rate policy.