Week of January 8, 2012 thru January 14, 2012

China PBOC Suspends Paper Sales, To Conduct Reverse Repos

BEIJING (MNI) - The People's Bank of China said Friday that it has suspended all sales of sterilization paper this side of the Chinese New Year holiday and will inject liquidity via reverse repurchase agreement transactions as needed.

"To ensure stable banking system liquidity before the Chinese New Year holiday, the People's Bank of China has decided to suspend the sale of paper before the holiday and will conduct short-term reverse repo transactions according to demand," the PBOC said in a statement.

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[TOPICS: M$Q$$$,MMQPB$,M$A$$$]

China's Zhou: Controls Still Needed W/ Open Capital Account

BEIJING (MNI) - Full liberalization of China's capital account would not mean the government will completely abolish controls over inflows and outflows, Chinese central bank Governor Zhou Xiaochuan said in comments published this week.

In a wide-ranging article covering his government's thinking on several areas critical to Chinese economic development, Zhou said Beijing needs to continue to manage foreign debt, to supervise financial transactions and to maintain controls over short-term and speculative capital flows.

His comments, which were published in China Finance magazine, suggest that the central government's longer-term goal of fully opening up the capital account will continue to include some degree of control.

ASIA FX: US Dollar Gains, Supported by Data, Euro Worries

SINGAPORE, Jan. 6 (MNI) - The U.S. dollar traded with firm bias in Asian market action Friday as investors continued with a positive view of U.S. economic data but remained worried about eurozone debt problems.

In U.S. economic data released Thursday, private payrolls processor ADP estimated that private payrolls grew by +325,000 in December, a much larger outcome than informal trader forecasts had expected.

The December ISM Non-Manufacturing Index rose to 52.6 vs. 52.0 November reading, a slightly weaker outcome than expected.

With no major data out of the Asia-Pacific region today, players were focused on tonight's U.S. non-farm payrolls data for December.

Germany Data: MNI Survey Of Econ Data Forecasts Jan 2 to 6

Industrial New Orders - November - %mom %yoy

Median Forecast -1.3 -0.1 High forecast 0.4 1.6 Low forecast -3.0 -2.3 Previous period - Number of responses 8 7 - 4Cast 0.4 N/A Barclays Cap. 0.0 0.7 Capital Economics -3.0 -2.3 Citi -2.2 -1.5 Commerzbank -2.0 -1.5 Natixis -0.6 -0.1 RBS -2.5 N/A Soc.

EMU Data: MNI Survey Of Econ Data Forecasts January 2 to 6

Economic Jobless Morale - November - - December - (%)

Median Forecast 92.9 10.4 High forecast 93.7 10.4 Low forecast 92.5 10.3 Previous period - Number of responses 6 5 - 4Cast 92.7 10.3 Capital Economics 92.5 10.4 Citi 92.5 10.3 Commerzbank 93.0 N/A Natixis 93.7 10.4 Soc.

MNI Survey: Japan Nov CA Surplus Seen -75% Y/Y, 9th Fall

-- See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) - Japan is expected to have posted a current account surplus of Y235.4 billion in November, down 75.4% on year, a ninth straight y/y decline after -62.4% in October, -21.4% in September and -63.4% in August, according to the median forecast of economists surveyed by Market News International.

The Ministry of Finance will release the data at 0850 JST on Thursday, Jan. 12 (2350 GMT on Wednesday).

The expected large decline in the current account surplus is due to a worsening trade account balance.

China Consumer Confidence Rises As Panic Over Economy Fades

BEIJING (MNI) - Chinese consumer confidence rebounded in December from November's near-record low as households became acclimatized to a slower pace of economic growth, INTAGE China said Friday.

The headline China Consumer Sentiment Index and all seven sub-indexes rose last month, the research company said, but remained below levels seen at the end of 2010 and early 2011, before the domestic economic slowdown and prior to Europe's simmering debt problems morphing into a full-blown crisis at the end of summer.

The total index measuring consumer confidence rose to 89.0 in December from 86.7 the previous month (which was just shy of September's record low of 86.5).

Japan Azumi: Watching FX Closely, Euro Fall Hurting Exporters

-- Japan Azumi Does Not Say If Recent Euro Drop Excessive

TOKYO (MNI) - Japanese Finance Minister Jun Azumi said on Friday that Tokyo is closely watching the recent volatile currency market fluctuations as the stronger yen against the dollar and euro threatens the economy's export-led recovery.

China 2011 FDI Seen Up 9% At $115 Bln: Press

BEIJING (MNI) - Foreign direct investment flows into China are expected to have risen by 9% last year to $115 billion, the China Daily reported Friday, citing Ministry of Commerce data.

The increase compares with 2010's $105.74 billion.

January-November foreign direct investment hit $103.7 billion, implying $11.26 billion in inflows during December alone, a 20% fall over inflows during the same month 2010.

The ministry is expecting average annual FDI of $120 billion between 2011 and 2015.

December FDI data is expected for release around mid-month.

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[TOPICS: M$Q$$$,M$A$$$,MAQDS$]

China Big Four Lend CNY210 Bln In December: Press

BEIJING (MNI) - China's big-four state-owned banks extended CNY210 billion in new loans in December, the 21st Century Business Herald said Friday, citing unidentified banking sources.

The big four extended CNY80 billion in the last five days of the month, on the back of a strong rebound in deposits. They attracted CNY1.25 trillion in new deposits in the month, thanks to the injection of fiscal deposits toward the end of the year, the newspaper said.

The big four banks -- the Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China - usually account for one third to one half of total new lending in the traditional banking system.