Yuan forwards drop as Wen slams appreciation calls

BEIJING - Yuan forwards weakened the most in more than four weeks after Premier Wen Jiabao said the currency is not undervalued and criticized international calls for appreciation. Government bonds slid.

Foreign pressure for currency gains can amount to trade "protectionism", Wen told a press conference on Sunday. He cited data showing exports to China had grown in 16 out of 37 major trading partners as evidence that the currency was fairly valued.

"I heard many foreign traders have sold yuan forwards as the premier's speech suggested the yuan's spot rate is unlikely to move this year," said Shi Lei, a Beijing-based financial market analyst at Bank of China Ltd. "His tone was very direct and strong to rebuff international pressure and market speculation."