The yen weakened vis-Ã -vis the U.S. dollar today as the greenback tested offers around the Â¥111.85 level and was supported around the Â¥111.35 level. The pair reached its strongest level since 9 November as traders positioned themselves ahead of tomorrowâ€™s FOMC interest rate decision. Data released in Japan overnight saw core private-sector machinery orders up 12.7% m/m to Â¥1.08 trillion in October, the first improvement in three months and above expectations. Also, November bank lending was up 0.7% y/y, the same rate as Octoberâ€™s increase, while the M2 + CD money supply was up 2%. The governmentâ€™s economy watchersâ€™ survey was released overnight and declined for the eighth consecutive month in November, printing at 41.5. Most traders believe BoJâ€™s Policy Board will keep the overnight rate unchanged at 0.5% for at least several months. The Nikkei 225 stock index lost 0.20% to close at Â¥15,924.39. Dollar bids are cited around the Â¥109.25 level. The euro gained ground vis-Ã -vis the yen as the single currency tested offers around the Â¥164.56 level and was supported around the Â¥163.20 level. The British pound and Swiss franc appreciated vis-Ã -vis the yen as the crosses tested offers around the Â¥228.70 and Â¥99.40 levels, respectively. The Chinese yuan appreciated vis-Ã -vis the U.S. dollar as the greenback closed at CNY 7.3954 in the over-the-counter market, down from CNY 7.4030. Data released in China overnight saw November PPI up 4.6% y/y. Chinaâ€™s banking regulator sees 2007 CPI above 4.4%. Peopleâ€™s Bank of China announced it will raise the reserve requirement on bank deposits by 100bps to 14.5%, effective 25 December. An unnamed source also announced that Chinaâ€™s trade surplus totaled US$ 26.28 billion in November, taking the year-to-date total to US$ 238.12 billion.
Join the Discussion