Japan ex-economy minister Takenaka says unthinkable to debate BOJ exit now

(GNN) - Former Japanese Economy Minister Heizo Takenaka said on Tuesday it would be unthinkable to debate now on an exit from the Bank of Japan's monetary stimulus as it would take another half a year to a year to see if deflation is conquered.

Takenaka, a prominent economist and member of a government advisory panel, also said Japan's growth figures for April-June could be a factor in determining whether fresh monetary stimulus would be needed, although that alone would not be a trigger.

"Exit is still far off," Takenaka told Reuters shortly before the BOJ decided to leave its massive monetary stimulus steady.

"We must pull consumers and investors out of a deflationary mindset by conquering deflation," said Takenaka, a Keio University professor who was considered a reformist when he was Junichiro Koizumi's economy minister from 2001-2005.

In recent months, the BOJ has begun informal discussions on how to prepare for the exit from the massive easing, current and former central bankers familiar with internal discussions have told Reuters.

In public, however, Kuroda has insisted it is too early to discuss exit strategies.

Contrary to Japanese policymakers' view, Takenaka said the economy is not on track yet although it is improving.

"It is getting better than before ... but we cannot yet say it's on track. It's going in the right direction but still insufficient in terms of absolute level," he said, noting that Tokyo share prices now are below their levels when Prime Minister Shinzo Abe was in power in his first term in 2007.

Takenaka expressed concern about a bigger-than-expected decline in household spending in May.

He said he wants to see whether consumer spending recovered in June and how sharply economic activity slumped in the second quarter following the April 1 sales tax hike.

"April-June GDP figures most likely turned out negative but to what extent ... would be one factor for judging" the need of additional monetary stimulus, Takenaka said.

He said the BOJ was unlikely to change policy on the basis of second-quarter gross domestic product (GDP) data alone.

(Reuters)(GNN - AIP)(Reporting by Tetsushi Kajimoto; Editing by William Mallard & Kim Coghill)

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Japan investors bulk up on French bonds, bet on euro zone "Japanisation"

* Japanese investors bought 60 pct or more of French debt in May-June

* Buying up six-fold from last year

* Euro zone a déjà vu for Japanese investors seared by long deflation

* French debt yields more than Germany's, rated higher than Italy's

* ECB easing seen as "biggest event of the year" for Japanese investors, broker says

By Hideyuki Sano

TOKYO, July 14 (GNN) - Japanese investors have been buying most of France's government debt recently in a record surge spurred by expectations that Europe faces the kind of deflation and growth that Japan suffered for decades.

Since the European Central Bank (ECB) signalled in May it would take radical steps to ease monetary conditions, banks and other big investors in Japan have piled into French bonds, convinced from their own experience that the debt of a country where the central bank is battling deflation represents a winning bet, market participants say.

"In a way, they are expecting Japanisation - deflation and a long period of zero interest rates," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities.

Japanese investors bought a net 1.9 trillion yen (14 billion euros) of French bonds in May, equal to more than 60 percent of the government's new issuance that month, Japanese Finance Ministry data shows.

Data is not available for June, but market participants say Japanese buying of French bonds has picked up from May amid a broader increase in buying of euro-zone debt. One suggested Japanese investors may have bought the equivalent of three-fourths of the French new issuance.

French bonds represents a Goldilocks trade for Japanese investors keen for euro-zone exposure: they yield more than German bonds, while lower credit ratings on Italy's bonds - the region's third-most-liquid market - deter active Japanese buying.

On a gross basis, Japanese investors bought 6.60 trillion yen ($65.2 billion) of French government debt in May, dwarfing last year's 1 trillion yen average and by far the most since the ministry began compiling such data in 2005.

JAPAN DEJA-VU

While the euro zone's financial crisis has seen spikes in market interest rates as bond prices plunged, Japanese investors have strong memories of a completely different dynamic.

As Japan suffered years of falling prices and tepid growth, the government's bond market proved one of the world's great long-term bull markets.

Having slashed interest rates to zero during this period, the Bank of Japan invented the now globally recognised idea of "quantitative easing" - mass purchases of bonds and other debt to inject cash into the economy.

"If you want to make money investing, you have to take the largest position you can take on the most important event of the year - that's how you win," said the Tokyo director of fixed income at a European brokerage. Japanese investors "think the ECB's easing is the biggest event of the year."

The ECB under President Mario Draghi has cut rates, pledged to keep them low "for an extended period" and said it will continue market operations that allot banks their full funding requests at a very cheap rate until December 2016.

Japanese investors have taken that as a signal rates won't rise for more than two years. That means free money by playing for "roll-down" gains on the yield curve: a five-year bond bought now at a 0.47 percent yield and held for two years should rise in price if market rates remain the same, given that three-year debt now yields 0.08-0.09 percent.

Helped by heavy Japanese buying, the French 10-year bond yield fell to a record low 1.5 percent last week.

But that is still nearly triple the yield that Japanese investors can get at home, where the BOJ's massive purchases - the central bank gobbles up the bulk of domestic JGBs - has crushed the 10-year yield to a 15-month low of 0.54 percent .

The ECB says there is little risk that the euro zone will slip into deflation, but it is déjà vu for Japanese investors, where the BOJ's unprecedented easing is only now generating a modest rebound in prices.

The euro zone inflation rate has slid for three years to 0.5 percent, with Italy at 0.2 percent in June.

Bank lending in the euro zone is falling as companies shed debt.

Wage growth is slowing, with some countries in southern Europe seeing wages falling.

Japanese investors keenly recall how, during long periods of stagnation, consumers stuffed their money into bank deposits and borrowing slumped, leaving banks with little choice but to plough their cash into Japanese government bonds.

Rising domestic savings boosted Japan's current-account surplus, supporting the yen and inflaming deflationary pressure - another parallel with the euro zone now. The euro zone's current-account surplus hit a record high in January, helping to support the euro despite the ECB's attempt to talk it down. (Reuters)(AIP)(Editing by William Mallard and Neil Fullick)

Japan says Pacific trade talks agree broadly on labor, health issues

(GNN) - Pacific trade talks have reached broad agreement on labor issues and sanitary and phytosanitary standards but some difficult aspects remain to be tackled, Japan’s chief negotiator said on Saturday.

U.S. President Barack Obama said last month he aimed to have a free-trade draft he could take to meetings with other leaders in November.

Chief Japanese negotiator Koji Tsuruoka said the 12 member nations of the Trans-Pacific Partnership (TPP) made progress at talks in Ottawa but there was no discussion about the timing of the overall accord in the regional free trade agreement.

"We came to Ottawa so that we would clarify what issues are left (after TPP talks in Ottawa) and find out the direction. We achieved the desired goal," he told a news conference.

But gaps remain to be bridged and further talks are required on issues such as intellectual property, state-owned companies and the environment, he said.

The meeting in Ottawa would be key to advancing the trade pact talks to their final stage by the end of the year, he had said last week.

But Tsuruoka said the countries felt the situation was not yet ripe to set the timing for a ministerial meeting as talks among officials had not made sufficient progress by the end on Saturday of the talks in Ottawa, which ran about a week.

The TPP talks also include countries such as Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Canadian Trade Minister Ed Fast told reporters on Friday he would not put a timeline on when the TPP talks will conclude.

"We are bringing all of our efforts to bear to bring these negotiations forward in a timely manner," he said.

Asked to comment on New Zealand's suggestion that Japan should be eliminated from the TPP if it doesn't open its markets to more farm imports, he replied:

"I'm not going to comment on what other TPP partners say. All of them are valuable partners; they all bring value to the table."

(Reuters - AIP)(Reporting by David Ljunggren in Ottawa and Kaori Kaneko in Tokyo; Editing by Clarence Fernandez)

Asia spooked by Wall Street loss, dollar dips

(GNN) - Asian shares caught Wall Street's gloom on Wednesday, while the dollar was on track for a sixth losing session against the yen after the Bank of Japan upgraded its view on capital expenditures.

The BOJ held policy steady as expected at the conclusion of a two-day meeting and maintained its overall upbeat economic assessment.

A man looks at an electronic board displaying Japan's Nikkei average (top C) and various countries' stock indices, as passers-by walk past outside a brokerage in Tokyo April 16, 2014.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.1 percent, after U.S. stocks fell in a broad selloff. .N

Asian investors also kept a wary eye on the situation in Thailand, where the army declared martial law on Tuesday after months of civil and political unrest.

Japan's Nikkei stock average .N225 skidded 0.6 percent, as investors awaited post-meeting comments by Bank of Japan Governor Haruhiko Kuroda from 3:30 p.m. (2.30 p.m.), after the Tokyo market close.

"The market is already jittery about falling U.S. bond yields leading to a weak dollar-yen. Kuroda's comment dismissing the possibility of further easing again won't do any good to the mood," said Hiromichi Tamura, chief strategist at Nomura Securities.

Japanese trade data for April released shortly before the market opened showed that the country posted a record 22nd month

of trade deficits. While last month's rise in exports beat forecasts, shipments to the key U.S. market slowed.

The dollar lost about 0.1 percent against the yen to 101.24 yen, not far from Monday's low of 101.10 yen, which was its weakest level since early February.

The recent downtrend in U.S. Treasury yields continued to undermine the dollar's appeal.

The yield on benchmark U.S. 10-year notes inched up to 2.51 percent in Asia from its U.S. close of 2.50 percent on Tuesday, but remained close to half-year lows.

Later on Wednesday, the U.S. Federal Reserve will release the minutes of its latest policy meeting, though most market participants did not expect any solid clues to emerge on the timing of a future hike to interest rates.

New York Federal Reserve President William Dudley said at an event on Tuesday that the U.S. central bank will likely be "relatively slow" in hiking interest rates.

The euro was flat on the day at $1.3702, not far from a nadir of $1.3648 touched on Thursday, which was its lowest since late February.

In commodities trading, U.S. crude rose 0.6 percent to $102.90 per barrel, supported by a disruption in Libya's oil output and an unexpected draw in U.S. crude oil inventory according to industry data.

Spot gold was up about 0.1 percent on the day at $1,295.50 an ounce.(GNN) (Reuters)

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Shri Navaratnam & Kim Coghill)

Cleanest Places on Earth

An old adage says that Cleanliness is next to Godliness. Indeed it is true that whenever you are in a clean and tidy place, you feel an inner peace and serenity. It could be our home and other specific locations where we feel we are safe where it could be our refuge from the cares and worries of the world. Hence, this is also a sign of development and higher state of human civilization that signifies growth and real stability. On this list, you could find the most sought paradise because of the highest maintenance of cleanliness and felicity, Below are the Cleanest Places on Earth.

1. Oslo, Norway

Oslo is considered to be the largest city found in Norway that also serves as the capital city of the country. It is the central place for shipping, banking, trade, and other industries. It has the most extensive transport system in Norway. It has good air quality, specifically when summer season comes in. It is known for its massive waterfalls, mountains, and its reputation of being one of the safest places in the world.

2. Adelaide, Australia

It is one of the key cities and most populous place in Australia. Nevertheless, some of the comments and feedback that most of the travelers give has something to do with its cleanliness and uncluttered environment. Also, it is the most affordable city where an individual can settle into, based on transportation and accommodations drafted in the whole country of Australia.

3. Honolulu, Hawaii

It has the cleanest air in America based on the air report conducted and released. It got an A mark for its Ozone or smog rating, along with the particle pollution or soot. This is in support and implementation of the Clean Air Act that people observe there.

4. Kobe, Japan

When it comes to cosmopolitan lifestyle, Kobe is the best city that you can find in Japan. This is the reason why it continuously attracts visitors from other nations and even within the locality. Some of the things that made it become comparatively distinct are with cleanliness through separate roadway drainage that avoids the release of untreated sewage into rivers and other waterways, which is one of the common issues in some countries and the picturesque seas and mountains. It is the 6th largest city in Japan.

5. Minneapolis, United States

This is not just part of the cleanest places in the world but it is cited as the second cleanest and smartest city in America. The criteria for achieving this recognition are because of the major improvements done in the district, as this is the only city that accepts electronic waste for free. According to the Travel & Leisure, it is a well-kept and a smart looking city.

6. Copenhagen, Denmark

It is the cleanest city in Europe, which is actually the result of the surveys conducted proactively among the travelers and visitors in various European countries. Hence, it is also the greenest place in the world. It is a bike and walk-friendly city found in Denmark. In fact, they embrace clean incinerators wherein they convert trash into energy.

7. Wellington, New Zealand

It is recognized as the greenest and cleanest city in New Zealand. Some of the things that made this place part of this list are considerably based on the quality of life that people maintain, open space, recycling processes that they are doing, which makes this place free from pollution.

8. Calgary, Canada

It is consistently ranked and included on the yearly top 10 list of the cleanest places on earth. This has been boosted because of the implementation and development of sanitation systems, two to three years ago with their Too Good to Waste Program. Moreover, they are consistent with their efforts in reducing demolition and construction waste, through trainings and financial incentive programs.

9. Ottawa, Canada

When it comes to ambiance, Ottawa is one of the comfortable and coolest places in the world as to its natural purity aside from humid continental climate that the place has. It is also the capital city of Canada. It is surrounded by forests, parklands, and wetlands.

10. Honolulu, Hawaii

It has the cleanest air in America based on the air report conducted and released. It got an A mark for its Ozone or smog rating, along with the particle pollution or soot. This is in support and implementation of the Clean Air Act that people observe there.

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