Week of March 18, 2012 thru March 24, 2012

Japan Jan Key Index Revised Up To -0.3 Points Vs Prelim -0.5

-- Japan Jan Leading Index Unrevised +1.1 Pt M/M

TOKYO (MNI) - Japan's coincident composite index (CI), which reflects current business conditions, fell a revised 0.3 point to 92.7 (preliminary -0.5 point, 93.1) in January, following a sharp rise in the previous month, Cabinet Office data showed on Friday.

As seen in preliminary data, the coincident CI posted the first fall in two months after a revised 2.9 point surge in December.

In January, five out of the 11 sub-indexes comprising the coincident index fell. They included shipments of industrial goods and those of capital goods.

The composite index was set at 100 in the 2005 base year.

Fed's Lacker: Fed Will Need To Hike Rates Sometime In 2013

BEIJING (MNI) - It is unlikely that "exceptionally low" Federal Reserve interest rates will be warranted until at least late 2014, as the Federal Open Market Committee restated after its March 13 policy meeting, Richmond Federal Reserve Bank President Jeffrey Lacker said early Friday morning.

Rather, the federal funds rate will likely need to rise "sometime in 2013," Lacker said in a statement released on the Richmond Fed website.

Lacker, a voting FOMC member, was the lone dissenter from the March 13 policy statement.

"I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for this length of time," Lacker said of the late 2014 timeframe.

China Stats Office Raps Local Government For Making Up Data

BEIJING (MNI) - China's National Bureau of Statistics accused a local government of forcing companies to report fabricated data in a warning Friday against intervening in data reporting.

ASIA FX: Dollar Mixed on Profit-Taking; Firm Undertone Cited

TOKYO, March 16 (MNI) - The U.S. dollar is consolidating its recent gains in Asian trade on Friday, hit by pre-weekend profit-taking, but the currency is expected to maintain a firm undertone amid prospects for a continued recovery of the U.S. economy.

Riskier currencies were steady against the yen amid improved risk sentiment following gains on global equity markets on Thursday.

"While the dollar succumbed to position adjustments following the rapid gain of late, underlying positive sentiment toward the dollar is likely to be continued, given growing optimism about the U.S. economy," said Junichi Ishikawa, senior analyst at IG Markets Securities Co.

China Commerce Ministry Offl Says Yuan Has Risen Too Quickly

BEIJING (MNI) - February's yawning trade deficit suggests that the Chinese yuan has strengthened too quickly recently and needs to weaken, a senior official with the Ministry of Commerce said Friday.

Vice-Minister Chen Jian's comments, made to reporters on the sidelines of a conference here, follow recent signals from the senior leadership that the Chinese government is shifting its currency policy after nearly seven years of appreciation against the dollar.

"The exchange rate should be based on market forces," he said. "The big trade deficit indicates that the yuan has appreciated too quickly and needs to fall back."

China's trade balance swung to a $31.5 billion deficit last month as exports failed to keep pace with imports.

China PBOC Sets Dlr-Yuan Parity Higher At 6.3200; +3.83% Y/Y

BEIJING (MNI) - The People's Bank of China set the yuan's central parity rate against the U.S. dollar at 6.3200 on Friday, higher than Thursday's 6.3359.

Today's fixing is below the record high of 6.2919 set on Feb.29.


Today fixing 6.3200 8.2650 7.5630 Prev. fixing 6.3359 8.2490 7.5445 Prev.

BOJ Feb Minutes: A Few Members: 1-2% Inflation Goal An Option

-- BOJ Feb Minutes: One Member Said Should Adopt 2% Inflation Goal
-- BOJ Minutes: Many Members: Term 'Understanding' May Sound Passive
-- BOJ: Some Members: Should Consider Refining Pro-Growth Loans

TOKYO (MNI) - A few members of the Bank of Japan's board suggested that one option for the BOJ was to set its new longer-term inflation goal in a range of 1% to 2%, instead of pinpointing 1%, the minutes of the BOJ's Feb. 13-14 policy meeting released on Friday showed.

US Tsy's Geithner: EZ Reforms Efforts Diminish Global Risks

NEW YORK (MNI) - European efforts since October have lessened the risk of a "catastrophic outcome," in the region and globally, U.S. Treasury Secretary Tim Geithner said Wednesday night.

Because of these efforts, "downside risks to global growth," are less than they were before," he said in response to questions about the eurozone, after a speech to the Economic Club of New York.

But risks remain:

"Keep a close eye on oil, Iran, and gas prices, and make sure Europe keeps moving," Geithner said.

When asked about tackling the U.S. budget deficit, he repeated that a balanced approach is best.

"You need a combination of modest revenues tied to reforms," he said. The deficit reduction needed in the next 10 years is only 2% of U.S.

US Geithner:Fin Crisis Hangover Dampening Easy Mon Pol Impact

(MNI) - U.S. Treasury Secretary Timothy Geithner Thursday evening said the lingering effects of the financial crisis are preventing the Federal Reserve's low interest rate policy from having a greater economic impact.

And Geithner argued strenuously against near-term reductions in federal deficit spending, saying that fiscal reform needs to be more long-term in nature. On the contrary, he said there is a "compelling need for additional action" by Congress to spur economic growth.

China Economic Data Calendar

All figures year-over-year percent changes unless otherwise specified.

Date Time For Event Previous Local/GMT


22 Mar 1030/0230 Mar Flash Purchasing Manager's Index (HSBC) +49.7 23 Mar 0935/0135 Mar MNI China Business Sentiment Flash Survey+58.16 23 Mar 1000/0200 Feb Conf Brd China Leading Index 225.7 23 Mar 1000/0200 Feb Conf Brd China Coincident Index 217.6 30 Mar 0935/0135 Mar MNI China Business Sentiment Survey +58.87 01 Apr 0900/0100 Mar Purchasing Manager's Index (CFLP) +51.0 01 Apr 1030/0230 Mar Purchasing Manager's Index (HSBC) +49.6 09 Apr 0930/0130 Mar CPI (% y/y, % ytd y/