The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥111.50 level and was capped around the ¥112.65 level. Technically, today’s intraday high and low were right around the 61.8% and 50.0% retracements of the move from ¥115.90 to ¥107.20. The pair shook off news that Bank of Japan is considering a downward revision to GDP growth in the current fiscal year to March 2008. Policymakers are said to be contemplating a reduction in economic growth forecasts to 1.3% from 1.8%, primarily on account of a pullback in the housing sector. An announcement is expected around 21-22 January at the Policy Board meeting. The government has already reduced its economic growth forecast to 1.3%. Most traders believe the BoJ Policy Board will keep interest rates unchanged for at least several months. The U.S. dollar depreciated 5.6% vis-à-vis the yen in 2007. The Nikkei 225 stock index lost 1.65% to close at ¥15,307.78. Dollar bids are cited around the ¥111.20/ ¥110.55 levels. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥164.40 level and was capped around the ¥165.75 level. The British pound appreciated vis-à-vis the yen as sterling tested offers around the ¥224.90 level while the Swiss franc depreciated vis-à-vis the yen and tested bids around the ¥99.25 level. In Chinese news, many traders believe People’s Bank of China will continue to tighten monetary policy in 2008. The USD/CNY exchange rate is expected to trade with a 7.29 handle soon.