Investigation of Motive Enhance China Japan Bond Purchase

Tokyo – Japanese Finance Minister said Thursday Yoshihiko Noda, the government is monitoring closely China’s increased purchases of Japanese government debt and will check in Beijing about his motivations.”We are giving careful attention” to the recent increase in purchases related to China against the Japanese government bond (JGB), “Noda said in a session of the parliamentary committee of financial problems, reported Dow Jones Newswires.

“I do not know the true intention” regarding China’s increasing appetite for JGB.But Tokyo plans to “work together closely (with Beijing) and assesses the point,” he said.China, in July, buying Japanese bonds worth 583.1 billion yen (6.9 billion dollars), Japan’s finance ministry said Wednesday, when the Asian giant will continue to increase purchases of Japanese debt.

This figure is higher than the value of securities purchased in June, 456.7 billion yen.The news came after the yen, Wednesday, 15 highest-reaching new year against the dollar. Currency traders said the yen berdenomiasi China’s purchase of property, even by itself too small to boost the yen, it can support the increase in the currency indirectly.

For the first half of this year, China bought debt worth 1.73 trillion yen, almost seven times over a full year’s record of about 253.8 billion yen in 2005.In May alone China investors buy Japanese government bonds net worth 735.2 billion yen.China seeks to diversify its investments out of the big bucks and Europe since the beginning of the financial crisis.Most bonds are purchased by the government of China is estimated to be used to manage foreign currency reserves.

This increase is in conjunction with the re-doubt recovery in the United States and Europe, and indicates China’s store more foreign currency reserves which as a result continues to expand into the Japanese bonds are relatively stable.With approximately 95 percent is held by domestic investors, the risk did not pay the debt of Japan is considered much smaller than the countries hit by the-debt, even though its public debt approaching 200 percent of gross domestic product, the highest among developed countries.

China’s foreign exchange reserves have swelled in recent years, soaring to a record 2.454 trillion dollars at the end of June.These reserves, has become the world’s largest, grew 15.1 percent from a year ago, China’s central bank said in its website.One way Beijing is diversifying its investment through an independent wealth fund China Investment Corp., which handles about 300 billion dollars and has invested heavily in resource companies.(AFP)

The Group of Seven rich countries is concerned about Greece's debt problems

The Group of Seven rich countries is concerned about Greece’s debt problems, a Canadian official said on Friday, and hinted that there may be other countries that will also need help.Canada is this year’s chair of the G7.Canadian Finance Minister Jim Flaherty would not discuss the substance of talks between G7 finance ministers and central bank governors early on Friday, but said his G7 partners were watching developments closely.

“We are concerned. We’re consulting closely with our international partners.”In addition to Canada, the G7 includes Britain, France, Germany, Italy, Japan and the United States.Echoing comments from other G7 officials, Flaherty told reporters that the G7 believed countries that are borrowing heavily need to rein in fiscal deficits. But he questioned if they could do that on their own.

“It’s necessary that, first of all, that the countries involved take the steps they need to take and be clear about that, that they’re going to take these steps toward fiscal restraint, fiscal responsibility,” he said.”They will need some help, in all likelihood, in order to manage the issue, as Greece did.”

Leaders of euro zone countries on Friday approved a deal by the European Union and International Monetary fund to provide an aid package to Greece, EU sources said. The aid package of 110 billion euros ($147 billion) is to be released to Greece over three years.The IMF board is to meet on Sunday to discuss its share of the rescue deal.Greece has promised to slash spending in return, measures which have provoked violent protests in Athens.

U.S. President Barack Obama, in remarks at the White House to highlight stronger-than-forecast U.S. April job growth, said he had discussed developments in the Greek debt situation with German Chancellor Angela Merkel by telephone.”We agreed on the importance of a strong policy response by the affected countries and a strong financial response from the international community,” Obama said.

“I made clear that the United States supports these efforts and will continue to cooperate with European authorities and the IMF during this critical period.”

GEITHNER TALKS WITH G7, U.S. REGULATORS

U.S. Treasury Secretary Timothy Geithner also participated in the G7 call, but a Treasury spokesman had no immediate comment on the outcome.A U.S. Treasury official earlier had described the call as being “focused on European leaders updating the G7 finance ministers and central bank governors” on Greece’s debt woes.Geithner also held conference calls on Friday morning with the heads of two U.S. market regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission, and with Federal Reserve officials.

The SEC and CFTC are investigating Thursday’s sudden stock market plunge, which some market sources say may have been caused by an errant trade by a large bank. An Obama administration official said the Treasury Department was closely monitoring the probe.The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States. It has lost significance as the world puts more stress on the broader Group of 20 industrialized and emerging economies, but retains a role in issues like the European debt crisis.(Reuters)

German Parliament at the end of last week approved the budget for 2010, with record levels of new loans

BERLIN German Parliament at the end of last week approved the budget for 2010, with record levels of new loans. This was done because the largest countries in Europe were trying to bounce back from last year’s recession the worst in six decades.As quoted by the AFP, Saturday (20/3/2010), 313 votes from MPs who agreed to 256 for the new budget. Where in the budget will be adan new debt worth 80.2 billion euros (USD108, 3 billion), which is two times the amount of loans obtained in Germany in 2009 and then.

Germany’s budget deficit this year is a maximum of twice as much as permitted by the EU fiscal rules, which increased to as much as six percent of gross domestic product (GDP) of Germany which for 3.3 per cent in 2009.Although demiikian, Finance Minister Wolfgang Schaeuble insisted he will bring the German deficit back below the upper limit of three percent in 2013.

He said that if Germany fails to comply with the rules, then the Germans will collapse, along with their European single currency, the euro. The current budget must be approved by the upper house of parliament, the Bundesrat.In 2009, the German economy experienced a contraction of five percent. Berlin hopes for the economy can grow as much as 1.4 percent this year.

Bosnia hails Kuwait ties as premier visits

SARAJEVO: Chairman of Bosnia’s tripartite Presidency Council Haris Silajdzic yesterday met the editors-in-chief of Arruya, Al-Dar and Kuwait Times as well as Secretary General of Kuwait Journalists Association Faisal Al-Qenai. The Bosnian leader highlighted the importance of the Prime Minister of Kuwait HH Nasser Mohammed Al-Ahmed Al-Jaber Al-Sabah’s visit and hailed his country’s ties with Kuwait.Bosnia and Kuwait also signed two agreement yesterday – a memorandum of understanding (MoU) to bolster political consultations between the foreign ministries of both nations and a loan deal under which Kuwait will provide Bosnia with a $45-million loan to build a portion of a key highway. The loan will be used for the construction of a 2.5-km stretch of a corridor linking the Hungarian capital Budapest with the Adriatic coast, Bosnian Finance Minister Dragan Vrankic told local media.

Sheikh Nasser and Silajdzic later visited a Kuwaiti-funded mosque in Sarajevo. The PM and the delegation accompanying him prayed at the mosque and then met with Bosnians who welcomed the visiting Kuwaiti delegation. Sheikh Nasser was then briefed about the history of the Kuwaiti-funded mosque. Construction of the mosque began in 2003 and finished in 2006. Sheikh Nasser also visited a children’s hospital in Sarajevo and was briefed about the services provided by the facility. The premier told the Bosnian press that he was very impressed by the services which the hospital provided and indicated that Kuwait and Bosnia-Herzegovina would work on developing health cooperation in the near future. (Material from agencies used in this report. A detailed interview with Haris Silajdzic will be published soon)