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Realistbear

Interest Rate Round-up

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Japan

http://www.thepeninsulaqatar.com/Display_n...06070175512.xml

Rosy Japanese data stokes talk of end to zero interest rates
Web posted at: 7/1/2006 7:55:12
Source ::: AFP
tokyo • Japan’s jobless rate hit an eight-year low in May while core consumer prices rose for a seventh straight month, reinforcing the view Friday that an end to zero interest rates is fast approaching.
Japan’s unemployment rate fell to 4 per cent in May, the lowest since April 1998 and down from 4.1 per cent in the previous month, the government said. Meanwhile the core consumer price index (CPI) gained 0.6 percent in May from a year ago, in line with market expectations.
The core CPI in June for Tokyo — the leading indicator for national price trends released — was up 0.3 percent from a year earlier. “With consumer prices showing a trend of mild inflation and the labour market tightening, the Bank of Japan may begin raising interest rates as soon as July,” said Daiichi-life Research Institute economist Yoshikiyo Shimamine.

India

hikes interest rates

Saturday July 1 2006 13:15 IST
THIRUVANANTHAPURAM: The State Bank of Travancore (SBT) has hiked the interest rates for domestic term deposits and non-resident ordinary term deposits for various periods with effect from July 1.

Saudi

http://framehosting.dowjonesnews.com/sampl...0006&Take=1

Saudi interest rates rise
Saudi Arabia's central bank raised interest rated by 20 basis points on Thursday, ahead of a 0.25% rise later in the day by the US Federal Reserve, reported Gulf News. Saudi's repo rate now stands at 5.2%; more rises are likely

Taiwan-China

http://framehosting.dowjonesnews.com/sampl...012&Take=19

Dow Jones & Company, Inc.
29 Jun 2006 08:52 GMT *DJ Taiwan Central Bank Hikes Key Rates By 12.5 Basis Points

Viet Nam

http://www.bvom.com/news/english/news/inde...88&.this=55

Interest rate rises: Unexpected race between banks
Almost every bank has increased its interest rates though banks themselves and experts had believed that the rates must reduce. There is now an unexpected race of raising interest rates.

And, of course, the Fed.

:)

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Looks like its all going to happen this month, makes up alittle for us losing the Cup I suppose:

http://business-times.asia1.com.sg/sub/new...,200375,00.html?

Bullish BOJ economy data expected

Short-term policy interest rates likely to be increased

By ANTHONY ROWLEY

A SLEW of bullish data on the Japanese economy is expected to be capped on Monday by the findings of the latest Bank of Japan (BOJ) quarterly survey of business sentiment, suggesting that the central bank will move this month to end its five-year-old zero interest rate policy. All this is expected to strengthen the yen further, and probably the Tokyo stock market too, analysts said.

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Looks like its all going to happen this month, makes up alittle for us losing the Cup I suppose:

http://business-times.asia1.com.sg/sub/new...,200375,00.html?

Bullish BOJ economy data expected

Short-term policy interest rates likely to be increased

By ANTHONY ROWLEY

A SLEW of bullish data on the Japanese economy is expected to be capped on Monday by the findings of the latest Bank of Japan (BOJ) quarterly survey of business sentiment, suggesting that the central bank will move this month to end its five-year-old zero interest rate policy. All this is expected to strengthen the yen further, and probably the Tokyo stock market too, analysts said.

Funny how the world looks to BoJ to help bring an end to this madness when they initiated it.

;)

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http://framehosting.dowjonesnews.com/sampl...0002&Take=1

1 Jul 2006 07:36 GMT DJ SINGAPORE PRESS: UOB To Raise Mortgage Rates By 50 BPs

SINGAPORE (Dow Jones)--United Overseas Bank Ltd. (U11.SG), Singapore's No. 2 lender, has warned several customers of an impending
50-basis-point rise in mortgage rates
, the Straits Times reported Saturday.
In its letter to affected customers, UOB attributed the need to raise rates to the "rising cost of funds," which are affected by the steady increase in Singapore interbank rates.

Getting ready for the Jap hikes?

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IR hiking frenzy continues in :

KOREA

http://times.hankooki.com/lpage/biz/200607...19133611870.htm

Banks Scrap Lending Rate Discounts

By Na Jeong-ju
Staff Reporter
Banks have abolished interest rate discounts for mortgage loan borrowers, causing heavier interest costs for households amid rising interest rates.

Jordan

http://www.jordantimes.com/sun/economy/economy3.htm

AMMAN (Petra) — Central Bank of Jordan (CBJ) Governor Umayya Touqan decided on Saturday to raise the key interest rates on monetary policy instruments by 25 basis points.

MALAYSIA

http://biz.thestar.com.my/news/story.asp?f...mp;sec=business

High inflation likely to affect interest rates
By NORASIKIN ABDUL HAMID
THE recent data released by the Statistics Department suggests that the impact of the recent hike in fuel prices on inflation has slowly diminished.

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SINGAPORE

http://framehosting.dowjonesnews.com/sampl...0002&Take=1

1 Jul 2006 07:36 GMT DJ SINGAPORE PRESS: UOB To Raise Mortgage Rates By 50 BPs

SINGAPORE (Dow Jones)--United Overseas Bank Ltd. (U11.SG), Singapore's No. 2 lender, has warned several customers of an impending 50-basis-point rise in mortgage rates, the Straits Times reported Saturday.
In its letter to affected customers, UOB attributed the need to raise rates to the
"rising cost of funds,"
which are affected by the steady increase in Singapore interbank rates.

Count the number of countries hiking. COF! Carry trade in action. It means the same funds are going to cost more in the entire world's banking system and whether Gordon likes it or not IR are going up.

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PHILIPPINES

By MARICEL E. BURGONIO

The Manila Times Reporter

The Bangko Sentral ng Pilipinas said it hasn’t ruled out an increase in interest rates this year, as it noted that demand for money continued to rise in May.
"If [rising]
global interest rates continue
and if there’s a need to adjust policy to address this, we will adjust," BSP Governor Amando M. Tetangco Jr. told reporters.
"The interest rate differential should be in favor of the Philippines," he said, referring to the gap between local and US interest rates.

EUROZONE

http://thebusinessonline.com/Stories.aspx?...2E-D07EB5AA1CEE

Euro zone expansion ‘will force up rates’

By Allister Heath

02 July 2006

Enlargement of the euro zone will force interest rates to rise to contain inflation, a report this weekend warns.
The appropriate rate
could be as much as one percentage point higher
if all 10 new EU members were to join (and the UK, Sweden and Denmark stay out) because of Eastern Eur­ope’s faster growth, says Dresdner Kleinwort Wasserstein.
Edited by Realistbear

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JAPAN

Tankan Survey confirms liklihood that BoJ will move rates up at next meeting:

http://uk.biz.yahoo.com/060703/323/gfxov.html

Monday July 3, 08:10 AM

The June Tankan survey results showed the headline diffusion index for large manufacturers rising to 21 from 20 in March, while combined capital investment by all industries is seen up 6.2 pct in the current financial year, against a fall of 1.3 pct in the March poll.
The data showing that firms' are planning to beef up capital spending was especially welcomed by the market even though the survey has strengthened expectations for the Bank of Japan to end its zero interest rates stance and hike its overnight call rate
possibly as early as its next policy meeting next week
.

http://news.moneycentral.msn.com/provider/...&ID=5780706

July 03, 2006 03:08 AM

ETReport: BOJ Likely to Start Raising Rates

All Associated Press NewsTOKYO (AP) - The Bank of Japan is expected to start raising interest rates this month or next, a news report said Monday.
The central bank is likely to raise interest rates amid signs of the Japanese economy's recovery, the Asahi Shimbun, a major newspaper, reported in its evening edition, without citing any sources.

Not long now. :)

Edited by Realistbear

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CHINA

http://www.chinadaily.com.cn/bizchina/2006...tent_631726.htm

Yi Xianrong: China must raise interest rates further

(Reuters)

Updated: 2006-07-03 14:18

China must raise interest rates more aggressively to stifle demand for credit that has fuelled an investment boom, an influential government economist said in remarks published on Monday.
Yi Xianrong, an economist at the Chinese Academy of Social Sciences, a top government think-tank, joined a chorus in support of raising borrowing costs to help ward off economic overheating after a slew of tightening measures in recent weeks.
"
Many economic problems are a result of low interest rates
and therefore raising bank lending and deposit rates would be the best method to resolve the problems," Yi was quoted as saying in a report posted on the official Web site (Chinamoney.com.cn).

Interest Rate Hikes Likely to Lead to Global Slump

By Shi Weigan

......./

Echoing the Fed, the European Central Bank increased its key interest rate to 2.75 percent on June 15. The Republic of Korea, Denmark and South Africa have also raised their interest rates by 25 basis points. And Japan's central bank may introduce its first interest rate rise in six years in July.
As a result, a global wave of interest rate rises will probably follow. Most countries may resort to tight monetary policies to combat intensifying inflationary pressure caused by global commodity price hikes, especially that of crude oil.
A worldwide tightening of monetary policies, though targeted against inflation, would serve to speed up a global economic slump.

......../

At the same time, one of the world's biggest economic powerhouses, the
United States, saw its real estate bubble burst earlier this year.
The most important question to be answered is whether it is possible for the world economy to have a soft landing after so many countries apply the economic brakes.
European countries are seeing a resurgence of its industry and a strengthening consumer confidence, but the higher-than-normal level of its capital market will soon have a negative impact on its economy
.
Admittedly, not every stock market slump is followed by a major depression. Yet in previous experiences, a new round of economic depression is always preceded by a stock market slump.
A dip in the stock market has been looming in many parts of the world since mid-May, including the United States, Europe, Japan and India.
In effect, the Fed's latest interest rate hike has underlined market expectations of further rate rises.
The drop in the stock market is probably a signal indicating the beginning of a new economic cycle in one or two years and a depression will certainly emerge soon.
The only good news is that the global economy has accumulated much stronger capability against the inflationary risks, which makes it able to resist the threats looming close.
Edited by Realistbear

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Japan

Fukui appears to be confirming what we all feared would come to pass one day:

http://www.nasdaq.com/aspxcontent/NewsStor...nternational.na

BOJ Fukui:Possibility Of Rate Hike Next Week Totally Open

TOKYO -(Dow Jones)- Bank of Japan Governor Toshihiko Fukui said Monday that he is totally open to the chance that the central bank will raise interest rates when it meets next week.
"That issue is completely open," Fukui told reporters after a meeting of the Council on Economic and Fiscal Policy, in response to a question about whether the BOJ's tankan survey shows that interest rates should be raised.

What Gordon does, or does not do, is not longer relevant if Japan begin tightening the worldwide screw.

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JORDAN

http://www.gulf-times.com/site/topics/arti...mp;parent_id=28

Jordan index drops on higher interest rates as Arab marts end mixedPublished: Monday, 3 July, 2006, 12:49 PM Doha Time
Dubai: Jordan’s main stock index fell, the biggest mover among Arab equity markets, after the Central Bank of Jordan raised its key interest rate by a quarter-point.

SOUTH AFRICA

http://www.busrep.co.za/index.php?fArticle...&fSetId=662

Reserve Bank governor Tito Mboweni raised concerns on June 27 that an "unsustainable" current account deficit could lead to further rand weakness, boosting inflation. The consumer inflation rate accelerated to an annual 4.1 percent in May, from 3.7 percent in April.
Although price increases over the 12 months to May were moderate, and within the Reserve Bank's 3 percent to 6 percent target, the consensus among economists is that they are high enough to cement the case for another hike in interest rates.
Glynos said this would suggest that the Reserve Bank was correct in hiking interest rates in June.
"I think we are going to see another rate hike in August and there is still space for another one in December," he said.
Edited by Realistbear

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Fukui appears to be confirming what we all feared would come to pass one day:

What Gordon does, or does not do, is not longer relevant if Japan begin tightening the worldwide screw.

This seems to good to be true. Could this really have the impact we've been waiting for?

Edited by delite1

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Fukui appears to be confirming what we all feared would come to pass one day:

What Gordon does, or does not do, is not longer relevant if Japan begin tightening the worldwide screw.

This seems to good to be true. Could this really have the impact we've been waiting for?

Several scary articles appeared in the main press around March-April when the Jap overnight rates increased. The "Yen carry" trade is expected to have a large impact on world interest rates simply because the source of most of the cheap finance over the past decade has come from Japan pumping billions into the market at extremely low rates. The UK has been a major beneficiary of a great deal of the cheap money which in turn found its way into the housing market which has risen due to the extremely accomodative rates. When that which inflated the bubble is removed it is reasonable to expect that some downforce of considerable magnitude will be unleashed onto property prices.

IMO, the effects of the carry trade have already impacted the UK in the form of increased mortgage rates for new borrowers.

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So if the likes of HBOS etc have been borrowing off the Japanese banks then effectively they have been enjoying a much better profit margin than they would have had they borrowed from the BOE. Now does this mean that the BOE have been too expensive as a money supplier for the last few years and that their actions have largely been irrelevant?

If so does this mean that Brown can not really control the UK housing market and ultimatley it comes down to the availabilty of cheap money and not the expensive stuff the BOE and Fed are currently offering?

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More from Japan:

July 04, 2006

Markets Brace For Demise Of Zero Rates As Economy Improves

TOKYO (Nikkei)--Japan's markets are rife with speculation that the improving economy, underscored by the latest tankan corporate sentiment survey from the Bank of Japan, could spell the end of zero interest rates sometime in the next couple of months.

A growing number of market participants believe that conditions for the BOJ to terminate its zero-rate policy are falling into place amid clear signs that the economy is improving. For this reason, they will be keeping a close eye on the bank's July 13-14 policy board meeting.

"There is a strong possibility that the BOJ will decide that the conditions are in place for ending zero rates due to the strength of the economy," says Hiromichi Shirakawa, chief economist at Credit Suisse Securities (Japan) Ltd. On Monday, the benchmark 10-year Japanese government bond yield rose to 1.965% as the bond market factored in an early end to zero rates.

Related Stories:

• Bond Yields Being Pushed Up By Speculation On Zero Rates' End

• ZERO RATES: End To Policy May Have Mixed Impact On Stock Mkts

• ZERO RATES: 2.1% Ceiling Seen For Yield On 10-Year JGBs

• ZERO RATES: Market Bets On BOJ Policy End As Early As July

The June tankan released Monday showed that major corporations plan to boost their capital spending by an average of 11.6% on the year for fiscal 2006 -- the highest rate of growth since fiscal 1990.

"Capital investment can contribute to a short-term upswing, but it can also create large swings in economic activity, including the risk of subsequent reactions," according to BOJ Governor Toshihiko Fukui.

This suggests that the bank may be looking to lift rates gradually before investment becomes too overheated to ensure that economic growth is sustained over the long term.

There are signs that supporting the BOJ's view that the driving economic force will shift from the corporate sector to the household sector. May's unemployment rate was down 0.1 point on the month at 4%, the lowest level since April 1998. So even if the BOJ hikes rates and growth in capital spending slows, an increase in consumer spending would help support the economy.

The consumer price index has also entered into a gradual uptrend thanks to growing demand. The May CPI posted a 0.6% rise on the year, a seventh straight month of positive growth. The climb in prices was not only because of oil products, but also reflected increases in service prices. This also suggests that conditions for ending zero rates may be falling into place.

But there are some causes for concern. It is probable that real economic growth will fall off from its pace in the April-June quarter and exports could drop. And it is not clear whether stock prices have stabilized.

"If share prices decline after the zero-rate policy is lifted, then the lifting could be seen as a failure," a high-ranking BOJ official says.

But Fukui stressed Monday that the BOJ has not made any decisions yet about the future of zero rates. "It's totally open," he told reporters after a Council for Economic and Fiscal Policy meeting.

The government is also in no rush to see an end to zero rates.

"It's not that the conditions are being met, but more accurately they are being put in place," according to Kaoru Yosano, minister of state for economic and fiscal policy.

(The Nihon Keizai Shimbun Tuesday morning edition)

Yesterday's Tankan survey was very upbeat and the Nikkei is up for the fourth day in row. the ten-year JGB is at 1.975 %--another 0.01% this morning. Could be sooner rather than later.

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Gordon is like a modern day Nero--as inflation burns he is fiddling:

http://today.reuters.co.uk/investing/finan...RITAIN-BANK.XML

BoE looks set to leave rates on hold in July

Tue Jul 4, 2006 5:32 PM BST7

By Sumeet Desai

LONDON, July 4 (Reuters) - The Bank of England looks certain to leave interest rates on hold for the 11th month running this week but many economists expect a rise early next year.
All 47 analysts polled by Reuters predicted last week the central bank's Monetary Policy Committee would leave interest rates at 4.5 percent when it finishes its two-day meeting on Thursday.

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Japan still too weak for an IR hike?

http://www.ft.com/cms/s/f24b481c-0b7f-11db...000e2511c8.html

Ministers press BoJ to keep policy of zero interest rates

By David Pilling in Tokyo

Published: July 4 2006 18:14 | Last updated: July 4 2006 18:14

Senior Japanese cabinet ministers on Tuesday came out strongly against ending the zero-interest-rate policy amid growing conviction that the Bank of Japan was preparing to raise rates by ¼ point.
Both Sadakazu Tanigaki, finance minister, and Heizo Takenaka, interior minister, said the economy had not decisively escaped from deflation, meaning it was too early to contemplate what would be the first rate increase in six years.
Mr Tanigaki said: “The BoJ needs to continue its zero-rate policy to support the economy from the monetary side and ensure the economy does not go back into deflation.”
Mr Takenaka said: “Money supply growth has been slowing down. In the normal sense, deflation has yet to be overcome.”
The comments from the ministers are unlikely to intimidate the BoJ’s nine-member board, analysts said. In March, the bank ended ultra-loose monetary policy earlier than expected in spite of strong warnings from politicians not to do so.

We may have a long wait for Japan to trigger the IR Tsunami? Leaving Gordon a few more months to keep inflating his bubbles.

Edited by Realistbear

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