Market Rumours

2010/04/26 13:47=DJ WORLD FOREX: Euro Rises To 1-Week High Vs Yen As Greek Concern Ebbs -3-
-The euro rose to a one-week high against the yen in Asia Monday as Japanese financial institutions and Asian short-term investors bought the common currency amid growing speculation that fiscally troubled Greece may soon receive financial support.After the country formally requested aid Friday through a joint European Union-International Monetary Fund mechanism, Greek Finance Minister George Papaconstantinou said Sunday that funds should be available by early May.Papaconstantinou also said the terms of the bailout would be acceptable to all euro-zone members, including Germany, dispelling some concerns stemming from German finance minister Wolfgang Schauble's remarks that it hasn't yet decided on aid. Papaconstantinou's comments also allayed concerns over a delay in aid disbursement after officials from the Group of 20 industrialized and developed economies did not formally unveil any new details on bailout plans in their weekend meeting, dealers said.The view that Greece may receive bailout funds soon means 'the euro is likely to get a bit of a break' this week from the Greece-related selling that has recently dogged it, said Hideaki Inoue, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Corporation. Investors expect aid will help Greece avert debt default in the near term.The common currency rose to Y126.30 in morning trade in Tokyo, its highest since April 16. At 0300 GMT, it stood at Y126.12 from Y125.78 late Friday in New York. It could rise to Y126.50 later in the global day, said Mitsubishi UFJ Trust and Banking Corporation's Inoue. Against the dollar, the euro was slightly higher, at $1.3376 compared with $1.3372.The dollar also rose against the yen, considered a safer-haven asset, marking a fresh three-week high at Y94.37. The U.S. unit could rise to Y94.50 later in the global day, Inoue said. Other dealers echoed that view, saying higher U.S. Treasury yields following strong housing data Friday would buoy the U.S. unit, though selling by Japanese exporters around Y94.50 should keep it below that level for now.Strong Asian equities also helped the euro and other higher-yielding, riskier currencies, dealers said. Led by Japan's benchmark Nikkei 225 Stock Average, which was up 2.08% at midday, the stock gains boosted short-term investors willingness to sell safe-haven currencies like the yen and dollar for their riskier counterparts such as the euro, Australian dollar and British pound.'The concerns over Greece have eased, which has helped share markets, and that in turn is hurting the yen today,' said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow.The Australian dollar rose to 19-month high against the yen at Y87.62, while the British pound marked a three-month high at Y145.72. The Australian currency could climb to Y88.00 and the pound to Y146.00 before profit-taking caps further gains, Tokyo Forex & Ueda Harlow's Sakai said.Several Asian currencies also hit fresh multi-month highs early Monday, with the Singapore dollar rising to a 20-month high and the Korean won reaching a 19-month high. In both cases, local traders said central banks are likely to intervene and slow the rallies later in the session.The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was down at 81.386 at 0300 GMT from 81.413 late Friday in New York.Meanwhile, Bank Indonesia was suspected of buying $100 million to keep the U.S. dollar at around IDR9,000, just above recent lows unseen since before the Lehman Brothers crisis in mid-2008. The country's central bank is believed to have been countering strong overseas demand for the Indonesian rupiah over the last few days, in line with Taiwan's and the Philippines' similar moves to keep their own currencies from rising too fast.In Thailand, the baht opened the session strong as investors shrugged off persistent political concerns after a quiet weekend without violent clashes between anti-government protesters and the army. However, the dollar fell short of multi-month lows at THB32 last week, and last traded at THB32.14.Elsewhere, dealers said China may be more likely to let its currency, the yuan, appreciate in the short term after G-20 officials avoided the kind of direct pressure against which China has recently chafed. Officials opted for a subtler message, with U.S. Treasury Secretary Timothy Geithner saying yuan appreciation would be in China's interests.'I think that the G-20's pushing of their agenda in this more nuanced way increases the chances of the Chinese authorities moving on the issue in the near term, probably by around July,' said Shinkin Asset Management senior manager of trading Jun Kato.

2010/04/26 12:31*DJ S&P: Japan Econ, Fiscal Conditions In Line With S&P Forecasts
2010/04/26 12:30*DJ S&P: Japan Upper House Elections Will Be Key For Rating

2010/04/26 09:13=DJ World Bank Boosts Capital By A Third, Shifts Voting Power
WASHINGTON -The World Bank won its first major funding boost in two decades after members reached a deal to increase its capital base by a third and give developing countries more power. Country members of the poverty-fighting multilateral bank are emerging from a week of tough negotiations on the sidelines of the spring meetings with an agreement to inject about $86.2 billion in lending capacity. The approval provides timely relief to an institution whose capacity has been stretched to the brink during the worst global recession since its creation at the end of World War II. The World Bank would also better reflect the shift underway in global economic power toward fast-growing emerging economies, with China gaining one of the top ownership positions. However, the U.S., which has traditionally been granted the bank's presidency, would maintain its veto power over major decisions despite giving up part of the additional holdings it would gain from providing capital. 'We can feel proud that we have concluded agreements on a transformative financial and governance reform agenda, along with new capital for the World Bank and a new and more representative shareholding formula,' U.S. Treasury Secretary Timothy Geithner said in a statement. Under the deal, the actual increase in paid-in capital increase would amount to $5.1 billion at the bank's International Bank for Reconstruction and Development, with $1.6 billion coming from the shift in shareholdings. But the IBRD, the bank's main lending arm, could call on a total of $86.2 billion from that paid-in amount, lifting the level of callable capital to $276.1 billion. Geithner said he will request required U.S. congressional approval for the increase. The World Bank has already committed an unprecedented $105 billion in financing for developing countries since the crisis erupted in mid-2008, and it would be left with a lending capacity of just $8 billion a year after fiscal year 2012 without the capital increase. World Bank President Robert Zoellick had warned that the failure to reach a deal would 'allow it to wane in influence' and ill-equipped to cope with future funding demands. Developing and transition countries, which would account for more than half the capital increase, would also boost their voting power by 3.13 percentage points to 47.19%. However, anti-poverty organizations were still calling for more fundamental change. Elizabeth Stuart, senior policy adviser at Oxfam International, said the voting shift would still leave behind poorer countries, which only received 'crumbs' out of the deal.

2010/04/26 09:11=DJ FOREX WEEK AHEAD: Euro Could Bounce, But Dollar Will Reign
NEW YORK -The euro is likely to bounce around in choppy trading next week as investors await a solid plan on a financial lifeline for cash-strapped Greece.But even if the common currency is granted a reprieve from the battering it's taken in markets lately, any relief will soon evaporate, as euro zone sovereign debt issues beyond Greece contrast with a U.S. economy marching steadily down the path to recovery.The entrenching U.S. recovery should lead the Federal Reserve's rate-setting committee, which meets Tuesday and Wednesday, to issue a rosier assessment of the economy that would bring forward expectations for an increase in key interest rates. The Fed will not move on ultra-low rates at next week's meeting, analysts said.'Due to the fiscal problems in Europe and deflation in Japan, the [European Central Bank] and [Bank of Japan] are unlikely to hike rates anytime soon,' said strategists at Morgan Stanley, whose pro-dollar positions comprised the largest portion of their portfolio.The dollar could further its recent gains to Y95 next week if the FOMC issues a brighter assessment of the economy. Friday afternoon, the dollar was at Y94.13 from Y93.56 late Thursday. The dollar could also advance against the euro and yen on next Friday's first-quarter gross domestic product preliminary report, which is expected to show 3.5% growth.Meanwhile, the euro will be buffeted by a likely stream of headlines as details are hammered out on the International Monetary Fund-European Union bailout for debt-laden Greece.Early in the week, the euro could see a short-term bounce to around $1.35 on lingering relief over the Greek aid package. But that effect is likely to be short-lived, with the common currency sold all the way down to $1.30 on the FOMC's brighter assessment of the U.S. economy mixed with worries over longer-term euro-zone issues, analysts said. Friday afternoon, the euro traded at $1.3374 from $1.3311 late Thursday, according to EBS via CQG.'This crisis has moved beyond being just a Greek crisis,' said Lena Komileva, head of G7 market economics at Tullett Prebon in London. 'It is a sovereign risk crisis,' that could spread across the euro zone.Also next week, investors will search for any clues China could move on yuan appreciation, as investors have interpreted Chinese officials dropping some hints the currency could be allowed to rise. However, the timing for any change in currency policy is still very cloudy, said analysts.

2010/04/26 09:03DJ IMF Official Warns On Japan Debt - Report
TOKYO (AFP)--A senior International Monetary Fund official warned of Japan's growing fiscal problems in an interview published Monday, describing the pace of deterioration as 'pretty high'. IMF Deputy Managing Director Naoyuki Shinohara made the comments in an interview with Kyodo news agency in Washington. 'Although Japan's problem should not be treated in the same way as the Greece debt crisis, its fiscal vulnerability is rising fairly high,' he said. While the fiscal deficit has been financed by high levels of saving in Japan, the pace of deterioration is now 'pretty high' and the country must implement consolidation plans, he said. Japan's outstanding public debt is projected to reach nearly 200% of gross domestic product this year, Kyodo noted. Last week the Fitch ratings agency warned that Japan's credit rating was under threat due to soaring government debt. Japan's debt has soared as the government spends its way out of the economic doldrums amid plummeting tax revenues and soaring welfare costs for its ageing population. Standard & Poor's in January warned that it might cut its rating on Japanese government bonds, which could raise Japan's borrowing costs.

2010/04/26 08:53DJ Germany 'Not Ready To Write Blank Check' For Greece -Foreign Minister
April 25, 2010 13:41 ET (17:41 GMT)DJ Germany 'Not Ready To Write Blank Check' For Greece -Foreign MinisterBERLIN (AFP)--Germany is "not ready to write a blank check" for Greece, Foreign Minister Guido Westerwelle said Sunday, after debt-stricken Athens appealed for an EU and IMF bailout.His comments came despite warnings from the head of the International Monetary Fund that speed was of the essence if a Greek bailout is to soothe money markets, after Germany earlier stressed it has the right to reject Athens' call."We are not ready to write a blank check," Westerwelle told the ZDF television channel."It is not at all agreed that Greece will actually receive aid from Europe... There will only be aid if there is no other way of stabilizing our common currency," he added.In an interview with the mass-selling Bild am Sonntag newspaper published earlier Sunday, German Finance Minister Wolfgang Schaeuble also underlined that Germany could refuse Greece's plea for emergency loans.

2010/04/26 08:51DJ Greek Finance Minister Sees Deal Finalized In Early May
WASHINGTON -Greek Finance Minister George Papaconstantinou said Sunday he expects final terms and conditions of the aid package to the country to be ready by early May, and to be acceptable to all his partners in the euro zone, including Germany.'We're all confident that this will be done in time and that we will be able to finance Greek public debt without any problem,' Papaconstantinou told a briefing. 'Early May is a good ballpark figure.'Back in Europe, German Finance Minister Wolfgang Schaeuble had told the newspaper Bild am Sonntag the German government, which would be the largest contributor to the aid package, still hasn't made a final decision on whether it will disburse the funds but didn't explicitly call for any additional action from Greece as a condition for its agreement.Papaconstantinou stressed that Germany is 'fully on board with the program' that it had signed up to with its euro-zone partners in March. That program requires a unanimous decision by the euro zone's heads of government.Papaconstaninou was dismissive of the more apocalyptic talk that has run through financial markets in the last week, which has mentioned the risks of a default and general debt restructuring, or a forced exit from the euro zone, more and more often.'Any talk of a debt restructuring is off the table,' Papaconstantinou said, adding that Greece 'is a member of the euro zone, will always remain a member of the euro zone, will always remain a member of the European Union.'He acknowledged that Greece still had work to do to convince the markets of its progress, but said that those that were betting on it to default 'will lose their shirts.'Papaconstantinou's comments followed a series of meetings over the weekend with top monetary officials and finance ministers from around the world, in parallel with the International Monetary Fund's spring meeting.Greece on Friday asked for the EU and IMF to activate a bail-out plan that could trigger up to EUR45 billion of emergency loans to the country this year.