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To: booyaka who wrote (65117)	7/2/2006 8:13:30 PM
From: gregor_us	Respond to of 110194

Japan's Tankan Business Confidence Rises to 21 Points. July 3 (Bloomberg) -- Confidence among Japan's largest manufacturers rose in the second quarter and corporate investment plans exceeded economists' expectations. The yen gained. The Bank of Japan's Tankan confidence index climbed to 21 in the June quarter from 20 in March, the central bank said in a report released in Tokyo today. The nation's biggest companies plan to increase spending by 11.6 percent this year, compared with the 9 percent median forecast of 27 economists. Spending plans of companies including Toyota Motor Corp. reflect confidence the expansion will rid the economy of more than seven years of deflation. Bank of Japan Governor Toshihiko Fukui said last month the bank will raise interest rates from near zero ``without delay' should investment become excessive. ``Domestic demand is resilient and there are more risks pointing to the economy overheating,' Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the report was released. ``We'll probably see the bank end its zero-rate policy in July.' The yen traded at 114.12 per dollar as of 9 a.m. in Tokyo compared with 114.33 before the report was released. The result was in line with the median forecast of 37 economists surveyed by Bloomberg News. In Germany, business confidence unexpectedly jumped to a 15- year high in June, the Ifo economic research institute said last week, strengthening the case for the European Central Bank to raise interest rates. The U.S. Federal Reserve raised its benchmark rate a 17th straight time on June 29. Consumer Prices Nine of 15 economists surveyed by Bloomberg News expect the bank to raise interest rates as soon as July 14, when a two-day meeting ends. The bank has kept rates near zero since March 2001. A report last week showed that consumer prices climbed for a seventh straight month in May, signaling that the nation's battle with falling prices, which prompted the introduction of the zero- rate policy, is over. bloomberg.com G