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To: goldsnow who wrote (9919)	4/13/1998 5:44:00 PM
From: goldsnow	Respond to of 116914

Japan turning table on USA and G-7? Japan plays its best cards to counter G7 criticism 03:52 a.m. Apr 13, 1998 Eastern By Yoshiko Mori TOKYO (Reuters) - Japan, under mounting international pressure to shore up the ailing Asian economies -- including its own -- will tell Wednesday's Group of Seven (G7) meeting that its best cards are already on the table. ''Through the recent economic stimulus package, we have responded in a major way to what the G7 had been pressing for,'' a senior Japanese official told reporters last week ahead of a meeting of the G7's top monetary officials in Washington. Japan is likely to respond to any criticism that it has let down its Asian neighbors by saying that it has tried to help by boosting the value of its currency in recent days -- a move it says is more vital than expanding its economy. ''Asian currencies, including the yen, have been overly weak against the dollar,'' the Japanese official said. ''Taking into account the fact that the United States was running a massive trade deficit, it would be desirable not just for Asian economies but also for the United States to have a fall in the dollar against the Asian currencies,'' he added. The Bank of Japan drove the dollar down by six yen or some 4.5 percent against the yen last week. The dollar has since recovered some losses to stand at around 129 yen in afternoon trade Monday. Bankers estimated that the BOJ spent well over $10 billion in a forceful attempt to defend the Japanese currency. Some officials at the Ministry of Finance said that the BOJ's persistent attempt to rein in the galloping dollar versus the yen reflected its belief that the regional economy is damaged less by Japan's slow growth than by the yen's weakness. Prime Minister Ryutaro Hashimoto brushed aside criticism that Japan was not acting as the growth engine for Asia when he attended a meeting of Asian and European leaders in London earlier this month. ''When Japan's GDP grows by one percentage point, it only contributes 0.2 percentage point to the five main economies in Asia,'' Hashimoto said. Economists said a weak yen hurts Asian nations by slowing capital inflows into the region from Japan and hitting their export competitiveness against Japanese products. The weak yen is also boosting Japan exports at a time when domestic demand is weak in the country. Flaccid import demand was blamed for the February surge in Japan's current account surplus, the broadest measure of trade in goods and services. It rose 97.1 percent from a year earlier to 1.67 trillion yen ($12.9 billion), MOF said Monday. In a bid to boost domestic demand, Hashimoto announced earlier this month income tax cuts of four trillion yen as part of a stimulus package to jump-start the nation's economy. Hashimoto said the stimulus package of over 16 trillion yen will include more than 10 trillion yen of ''real water'' -- outlays that directly push up domestic demand. The package includes public works spending and tax cuts of two trillion yen for this fiscal year and two trillion yen for 1999/2000. U.S. Treasury Secretary Robert Rubin Friday said the latest fiscal package by Japan was a step forward and urged Tokyo to get on a ''strong domestic demand-led economic track.'' However, economists say the package is unlikely to spur a Japanese recovery anytime soon. Susumu Takahashi, chief economist at the Japan Research Institute in Tokyo, said that the package would likely boost GDP by only one percentage point in the current fiscal year. This would put Japan on track for GDP growth of around 0.5 percent in fiscal 1998/99 ending March 31. While the stimulus package would ease the strong downward pressure on the economy, any real signs of life may not come before the end of the year, Takahashi said. With Upper House elections coming in July, the ruling Liberal Democratic Party (LDP) is sticking to unnecessary public works spending in order to secure the votes of its key local constituencies. Economists say income tax cuts alone are also not the answer as most of the money will be saved, rather than being spent, due to continuing falls in Japanese asset prices. ''What is necessary now it to put in place measures to help companies boost profit. In that sense, corporate tax cuts combined with deregulation are favorable,'' said Teruhiko Mano, adviser to the president of Bank of Tokyo-Mitsubishi. Japanese officials, meanwhile, maintained that they will convince their G7 counterparts -- the United States, Britain, Canada, Germany, Italy and France -- in Washington that Tokyo has done enough for the moment. ''I do not think there will be any further discussion about Japan's policies at the meeting,'' the senior official said. Copyright 1998 Reuters Limited.

To: goldsnow who wrote (9919)	4/13/1998 6:23:00 PM
From: PaulM	Respond to of 116914

Not the way I heard it. BOJ Believed to have sold Bills... biz.yahoo.com Three month bill rates closed up 11 basis points (or don't the mean DOWN?). The price of the treasury's savings obtained from moving to short term debt may soon become apparent. The Fed will of course be there to save the day most of the time, but I think Terry's tip about investing in paper production is looking better by the day.

To: goldsnow who wrote (9919)	4/13/1998 6:29:00 PM
From: PaulM	Read Replies (1) \| Respond to of 116914

Do CB sales of U.S. bonds mean their losing their "mystical" quality? ;-). EOM.

To: goldsnow who wrote (9919)	4/15/1998 5:46:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116914

INTERVIEW-Rosy future seen for India gold demand-WGC 02:42 p.m Apr 15, 1998 Eastern By Anshuman Daga BOMBAY, April 15 (Reuters) - India's easing of rules in the gold market, rising personal disposable incomes and low prices have combined to create an upbeat future for gold demand in India, a top official of the World Gold Council (WGC) said on Wednesday. ''We have a growing class of gold consumers in India. One of the effects of liberalisation in the gold sector is that gold is available easily at reasonable prices,'' WGC Regional Chief Executive Rolf W. Schneebeli said. India's middle class, estimated at about 100 million people, has traditionally driven gold demand in the country. ''If you have the largest market in the world roaring at the fastest pace, that should underline that the fundamentals are extremely positive,'' Schneebeli told Reuters in an interview. India strengthened its position as the world's largest gold-consuming country with demand surging 45 percent to an all-time high of 737 tonnes in calendar 1997, WGC data shows. ''A large part of the demand in India is driven by disposable incomes but I think lower prices are not the explanation for every thing,'' Schneebeli said. Indian standard gold 24 carat ended Wednesday at 4,240 rupees ($106.80) per 10 grammes, up from January levels of 3,985 when world prices tumbled to 18-1/2 year lows of around $276 an ounce. London spot gold closed Wednesday at $307.20 an ounce, off from last week's five-month high of $314.40. ''Our research shows that for the the first time, people have spare money. What they do with the money is to buy gold,'' he said. India's main demand is for gold jewellery, given and used at an estimated 10 million weddings, absorbing nearly 300 tonnes of the metal annually, Bombay Bullion Association estimates show. ''Assuming the economic development continues without much changes, I would see a return to a natural annual growth rate -- of about 10 percent as possible,'' Schneebeli said. Based in Dubai, Schneebeli oversees the industry-funded WGC's operations in the Middle East and India. He is in Bombay to release WGC's''Indian Gold Jewellery Design Resource Book 1998-99.'' WGC represents gold miners and monitors gold demand in markets which together represent some 80 percent of global gold demand. The Indian government in October liberalised bullion import rules, authorising three-state-run agencies and eight banks to freely import and sell gold in the domestic market. Since then, the government has added one more nominated agency and bank to the list. Schneebeli welcomed easing bullion rules in India but added that simplification of tax rules at state levels was needed. ''The Indian government has made dramatic changes in the system of how gold is imported, manufactured and exported,'' he said. ''I think even two years ago, nobody in his or her wildest dreams would have anticpated such bold moves. All these changes came about so rapidly,'' he added. ''Right now, we have different tax systems at different states and this leads to tremendous distortions of gold flows. We need uniform and lower taxes.'' Schneebeli continued, ''This would help make gold flows more efficient, faster, cheaper and will ultimately benefit the consumer and also the export industry.'' The gems and jewellery sector has a weightage of about 14 percent in India's total exports. ($1- 39.70 rupees) ^REUTERS@ Copyright 1998 Reuters Limited.