Oil Japan sees upward pressure on yen waning

Oil Japan sees upward pressure on yen waning Foreign exchange dealers are seen beneath an electronic board displaying the Japanese Yen's exchange rate against the U.S. dollar at a foreign exchange trading company in Tokyo February 22, 2012. REUTERS/Kim Kyung-HoonEnlarge Photo Foreign exchange dealers are seen beneath an electronic board displaying the Japanese Yen's exchange rate against the U.S. dollar at a foreign exchange trading company in Tokyo February 22, 2012. REUTERS/Kim Kyung-Hoon By Tetsushi Kajimoto MEXICO CITY (Reuters) - A senior Japanese Finance Ministry official said the upward pressure on the yen was easing and he saw nothing strange in the currency's movements as it pulls away from record highs below 80 yen versus the dollar. The official, speaking after the first day of the weekend gathering of Group of 20 finance ministers and central bankers, said the yen was not discussed at the meeting which was dominated by talks on the euro-zone sovereign debt crisis. But the G20 did discuss volatility in currencies as well as crude oil prices, the official said, adding that these issues may be mentioned in the communique expected at the end of the meeting on Sunday. Brent crude futures settled near a 10-month high above $125 a barrel on Friday on heightened concerns over tensions with Iran about its nuclear program. Japanese authorities will continue to respond to excess volatility in currencies, he added, signaling readiness to intervene if speculators push up the yen too high again to deal a blow to the export-reliant economy. 'We hear opinions overall, including at deputies' meeting, that volatility exists in the foreign exchange market, so I expect (G20) may mention that volatility warants close monitoring,' the official said. 'We have said that (the yen's) moves have been excessive including before and after (last year's) earthquake, which was not reflecting economic fundamentals. But I see nothing strange in the current movement,' he added. The yen, meanwhile, tumbled across the board, a downtrend that started with the Bank of Japan's recent monetary easing. Japan's trade deficit, widening interest rate differentials with the United States favoring the dollar and rising crude oil prices also have hurt the yen's prospects. The dollar hit a fresh 7-1/2-month high of 81.062 yen on trading platform EBS and was last 80.990, away from 75.31 yen hit last October when Japan intervened heavily to protect exporters and drew criticism from the United States. The Bank of Japan, along with the European Central Bank and the U.S. Federal Reserve, is taking unconventional steps to boost the economy. The BOJ boosted asset purchases by 10 trillion yen on February 14 and pledged to keep ultra-easy policy until a 1 percent inflation goal is in sight. Bank of Japan Governor Masaaki Shirakawa said on Saturday that policymakers were also closely watching the effects of monetary easing on crude prices. But he said he did not see monetary easing as a big factor and the recent spike was more due to geopolitical tensions and some bright spots in advanced economies after the New Year. 'Generally speaking, we'll closely watch effects and side-effects of monetary easing,' he said. (Additional writing by Krista Hughes; Editing by Ed Lane)

Signals Etisalat eyes mobile remittances in Gulf

Signals Etisalat eyes mobile remittances in Gulf Companies: AFN RELATED QUOTES Symbol Price Change AFN 0.00 0.00 Related Content A man walks past a sign at the headquarters of telecommunications company Etisalat in Dubai October 25, 2011. REUTERS/Jumana El HelouehView Photo A man walks past a sign at the headquarters of telecommunications company Etisalat in Dubai October 25, 2011. REUTERS/Jumana El Heloueh By Matt Smith DUBAI (Reuters) - UAE telecoms operator Etisalat (ABD:ETISALAT), which saw $1.8 billion moved over its network last year via money transfers, has sought regulatory approval to expand its financial services offerings in the Gulf region, home to millions of expatriates. Mobile money services allow customers to pay bills or make remittances using SMS text messages, often at a cheaper cost than through banks or money transfer firms. 'Remittances are a huge business opportunity,' George Held, director of products and services at Etisalat, told Reuters. 'The cost base for telecoms operators is much different than for banks and exchange houses. We do not need bricks and mortar branches, so our costs are lower and we can pass on this saving and offer better exchange rates and transaction fees.' The former monopoly was expected to focus on its home market and Saudi Arabia. Both countries have large expat populations and inbound annual remittances were worth about $36 billion combined in 2010, Held said. About 89 percent of the UAE's 8.3 million population are expatriates, while in Saudi Arabia just over a fifth of the 27 million population are foreigners. Etisalat's Egypt unit could also profit from an estimated $8 billion of inbound remittances from Egyptians working abroad. Etisalat has tied up with Western Union and MoneyGram International to allow money sent by mobile customers in the Middle East to be collected anywhere in the world. Aside from remittances, the operator hopes to offer salary payments, peer-to-peer domestic funds transfers and utility and shop payments. 'Remittances will be an extremely important part of our mobile money services. But it is not enough alone to drive service adoption, so we will offer a mix of services to make it very hard for customers not to get involved,' said Held. Etisalat already offers some of these services in six countries, including Afghanistan, Pakistan, Sri Lanka and Tanzania and plans to expand this to the 17 countries in which it operates in Asia, Africa and the Middle East. 'We want to introduce mobile money in the rest of our markets as soon as possible. It is not a technical issue, but ticking all the boxes from a regulatory, compliance and customer education point of view,' Held said. LESS MONEY, MORE LOYALTY Mobile money has taken off in parts of Africa, where a minority of people hold bank accounts and the banking infrastructure in rural areas remains limited. About 8 percent of Tanzania's gross domestic product is thought to go through mobile banking. Text-based financial services will not help stem a decline in global SMS revenues - seen dropping up to 40 percent over the next three years as users opt for alternative text services such as BlackBerry Messenger or WhatsApp - but it can improve customer loyalty. 'When people have a mobile wallet ... we believe they will stay with us for a long time,' Held said. 'When was the last time you changed your bank account?' Etisalat will face challenges in convincing customers in the Gulf region, who have easy access to banking and exchange houses, to switch. 'In this region, people are used to going to the bank for transactions - they like to get a receipt. It is not a game-changer for telecom operators' revenues,' said a regional telecoms analyst. Pedro Oliveira, partner at consultant Oliver Wyman, said telecoms operators face a tough task competing with conventional exchange houses. 'Low income workers in the Gulf count every penny. So, it is not convenience that matters, but cost,' he said. 'For expats with prepaid contracts wanting to send money home, they would have to buy prepaid cards to top up their phone balance and then send a text.'

Signals Gold & Copper Trends Are Still Higher: Holmes

Signals If you told me yesterday that the largest bank in the U.S. was going to report lackluster earnings results, and Standard & Poor's was going to take its credit rating clever to Europe, but the markets would largely shrug it off - I probably would have politely told said 'you're crazy!' Welcome to reality; it all happened today. And the little market that could clearly thinks it can still test higher levels and isn't going to let some silly headlines derail it. While JP Morgan (JPM), the big banks (^BKX), and the Euro are getting whacked today, it doesn't change the strategy of money managers like Frank Holmes, the CEO & CIO of US Global Investors, who says the crisis du jour has no bearing on the long term opportunities. 'I am a big believer that you buy gold on down days,' this transplanted Torontonian tells us from his new home in Texas. He believes this year could be 'one of those odd years' that the dollar and commodity prices rise together. And much as Holmes likes gold, he loves the gold miners (GDX) even more, largely because they got sold off alongside other stocks last year while the precious metal they produce rose 10%. 'I think the really big opportunity right now is gold stocks,' he says pointing to their relative price compared to spot gold, as well as their historically low price-to-book ratios, and in some cases dividend yields too. Among the names he likes and owns now are Yamana (AUY), RandGold Resources (GOLD), and lesser-known Franco Nevada (FNV) --which Holmes says pays a monthly dividend. As for the metal itself, Holmes is unmoved by the most recent developments and has had no change in his belief that 'anytime you have inflation running at 3% and you're getting 0.1% in a money market fund, it's always better to own gold.' He is similarly undaunted and unchanged in his conviction about copper and belief that China will successfully engineer a soft landing. He's staying long copper because of the country's plans to build 24,000 miles of high speed rail, and he likes the recent uptick in the JP Morgan Global Purchasing Managers Index, which signaled expansion for the first time in almost a year. 'I think copper will go higher,' he states. 'Just like oil can easily have supply restricted, you have seen copper restricted.' Related Quotes: JPM 35.92 -0.93 -2.52% ^BKX 43.44 -0.17 -0.39% XLF 13.81 -0.11 -0.75% EURUSD=X 1.268 -0.0029 -0.23% FXE 126.33 -1.43 -1.12% ^STOXX50E 2,338.01 -7.84 -0.33% FEZ 29.06 -0.57 -1.92% GCF12.CMX 1,632.40 -14.90 (-0.90%) GLD 159.26 -1.12 -0.70% IAU 15.97 -0.11 -0.68% GDX 54.05 -0.67 -1.22% AUY 15.68 -0.12 -0.76% GOLD 108.83 -2.03 -1.83% FNV 39.90 -0.40 -0.99% FXI 36.74 -0.10 -0.27% HGF12.CMX 3.597 -0.05 (-1.29%) COPX 13.91 -0.12 -0.86% CU 31.45 -0.33 -1.04%

Earn Consumer Comfort Highest in Six Months

Earn Consumer Comfort Highest in Six Months Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism. The Bloomberg Consumer Comfort Index was minus 44.7 in the period ended Jan. 8 from minus 44.8 the prior week. As recently as October, the index registered its lowest readings since the 2007-2009 recession, making 2011 the second-worst year in 25 years of data. It's since increased in four of the past five weeks. 'Considering where it's been, the trend is a welcome one,' Gary Langer, president of Langer Research Associates LLC in New York, which compiles the index for Bloomberg, said in a statement. 'Sentiment is hardly on a predictable path, given factors including the uncertainty of the 2012 presidential election, volatility in global markets and economic question marks from Europe to China.' Less unemployment and growing payrolls may be lifting consumers' moods, providing the spark for increases in consumer spending, which accounts for about 70 percent of the economy. Nonetheless, gasoline prices that are once again rising and wage gains that fail to keep pace with inflation may be obstacles to greater improvement in confidence. Other reports today showed retail sales rose less than forecast in December and claims for jobless benefits climbed more than projected in the first week of the year. Retail Sales Purchases increased 0.1 percent last month after a 0.4 percent advance in November that was more than initially reported, Commerce Department figures showed. Economists forecast a 0.3 percent December rise, according to the median estimate in a Bloomberg News survey. Purchases excluding automobiles fell 0.2 percent, the first decline since May 2010. The number of applications for unemployment benefits climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed. The median forecast of 46 economists in a Bloomberg survey projected 375,000. Stocks rose as sales of government securities in Spain and Italy eased concern the countries would struggle to finance their debts. The Standard & Poor's 500 Index climbed 0.1 percent to 1,293.76 at 9:40 a.m. in New York. The comfort survey's gauge of Americans' views of the current state of the economy rose to minus 82.1 last week from minus 82.9 in the prior period. The buying climate index held at minus 49.4, and the measure of personal finances decreased to minus 2.6 from minus 2.2. The gain in the cumulative Bloomberg index last week was within the survey's three-point margin of error. More Jobs Better employment opportunities are probably holding up confidence. Payrolls increased by 200,000 in December, and the jobless rate dropped to 8.5 percent, the lowest since February 2009, a Labor Department report showed last week. Employers added 1.64 million workers in 2011, surpassing the prior year's 940,000 advance and the biggest gain since 2006. Sentiment has been improving among lower-income Americans. The index for those earning less than $15,000 per year increased to the highest level since October, and those making up to $24,999 were the most optimistic since February. The ebbing of pessimism was also evident among older households. The measure of confidence among those older than 65 rose to minus 39.9, the best reading since April. Brighter moods may help drive consumer spending in 2012 following the holiday shopping season. 'Extremely Pleased' 'We are extremely pleased with our December sales results as we significantly exceeded our expectations,' Sherry Lang, a spokeswoman for TJX Cos. said in Jan. 5 conference call. Sales at the Framingham, Massachusetts-based retailer increased 8 percent last month. 'Further, we entered January with very lean inventories and the flexibility to ship fresh merchandise at great values to our stores.' The gain in the Bloomberg index parallels improvement in other surveys. The Conference Board's confidence gauge increased in December to the highest level since April. That same month the Thomson Reuters/University of Michigan index of consumer confidence rose to the highest level since June. Nonetheless, rising gasoline prices may constrain sentiment. The cost of a regular gallon of fuel at the pump climbed to $3.38 yesterday, up 5.5 percent from a 10-month low reached on Dec. 20, according to data from AAA, the nation's largest auto group. 'While the recent trend in consumer confidence is encouraging, risks remain,' said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. 'The recent rise in gasoline prices is likely to act as a restraint on improving consumer confidence in January.' Annual Averages Bloomberg's comfort index, which began in December 1985, averaged minus 46.8 for all of last year, second only to 2009's minus 47.9 as the worst year on record. The gauge averaged minus 45.7 for 2010. The Consumer Comfort Index is based on responses to telephone interviews with a random sample of 1,000 consumers 18 years old and over. Each week, 250 respondents are asked for their views on the economy, personal finances and buying climate; the percentage of negative responses for each measure is subtracted from the share of positive views. The results are then summed and divided by three. The most recent reading is based on the average of responses over the previous four weeks. The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative. Field work for the index is done by SSRS/Social Science Research Solutions in Media, Pennsylvania. To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Signals Europe downgrade fears make Treasurys a hot buy

Signals Investors are snapping up Treasurys and ditching European debt after news reports that France's credit rating could be downgraded on Friday. Several news outlets, citing unnamed sources, said Standard & Poor's was about to cut the credit rating of France and other European countries. In another fretful sign, U.S. exports to Europe plunged nearly 6 percent in November. Traders dumped higher-risk investments such as stocks and debt issued by European nations, causing borrowing costs for Italy and others to rise. If Italy risks defaulting on its debts, the crisis throughout Europe would worsen dramatically. The price of the 10-year Treasury note leaped 66 cents per $100 invested, pushing its yield down to 1.86 percent at 11 a.m. Eastern time. The yield peaked at 1.94 percent earlier Friday.

Oil France loses AAA-rating in blow to eurozone

Oil PARIS (AP) -- France's finance ministry says Standard & Poor's has cut the country's credit rating by one notch to AA. France's loss of its AAA-rating deals a heavy blow to the eurozone's ability to fight off its debt crisis. The country is the second-largest contributor to the currency union's bailout fund. S&P in December put 15 eurozone countries on creditwatch and other downgrades were expected later Friday. The cut in France's creditworthiness could also hurt President Nicolas Sarkozy's re-election chances. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below. ROME (AP) -- Europe's ability to fight off its debt crisis was again thrown into doubt Friday when the euro hit its lowest level in over a year and borrowing costs rose on expectations that the debt of several countries would be downgraded by rating agency Standard & Poor's. Stock markets in Europe and the U.S. plunged late Friday when reports of an imminent downgrade first appeared and the euro fell to a 17-month low. The fears of a downgrade brought a sour end to a mildly encouraging week for Europe's heavily indebted nations and were a stark reminder that the 17-country eurozone's debt crisis is far from over. Earlier Friday, Italy had capped a strong week for government debt auctions, seeing its borrowing costs drop for a second day in a row as it successfully raised as much as euro4.75 billion ($6.05 billion). Spain and Italy completed successful bond auctions on Thursday, and European Central Bank president Mario Draghi noted 'tentative signs of stabilization' in the region's economy. A credit downgrade would escalate the threats to Europe's fragile financial system, as the costs at which the affected countries — some of which are already struggling with heavy debt loads and low growth — could borrow money would be driven even higher. The downgrade could drive up the cost of European government debt as investors demand more compensation for holding bonds deemed to be riskier than they had been. Higher borrowing costs would put more financial pressure on countries already contending with heavy debt burdens. In Greece, negotiations Friday to get investors to take a voluntary cut on their Greek bond holdings appeared close to collapse, raising the specter of a potentially disastrous default by the country that kicked off Europe's financial troubles more than two years ago. The deal, known as the Private Sector Involvement, aims to reduce Greece's debt by euro100 billion ($127.8 billion) by swapping private creditors' bonds with new ones with a lower value, and is a key part of a euro130 billion ($166 billion) international bailout. Without it, the country could suffer a catastrophic bankruptcy that would send shock waves through the global economy. Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met on Thursday and Friday with representatives of the Institute of International Finance, a global body representing the private bondholders. Finance ministry officials from the eurozone also met in Brussels Thursday night. 'Unfortunately, despite the efforts of Greece's leadership, the proposal put forward ... which involves an unprecedented 50 percent nominal reduction of Greece's sovereign bonds in private investors' hands and up to euro100 billion of debt forgiveness — has not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt,' the IIF said in a statement. 'Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach,' it said. Friday's Italian auction saw investors demanding an interest rate of 4.83 percent to lend Italy three-year money, down from an average rate of 5.62 percent in the previous auction and far lower than the 7.89 percent in November, when the country's financial crisis was most acute. While Italy paid a slightly higher rate for bonds maturing in 2018, which were also sold in Friday's auction, demand was between 1.2 percent and 2.2 percent higher than what was on offer. The results were not as strong as those of bond auctions the previous day, when Italy raised euro12 billion ($15 billion) and Spain saw huge demand for its own debt sale. 'Overall, it underscores that while all the auctions in the eurozone have been battle victories, the war is a long way from being resolved (either way),' said Marc Ostwald, strategist at Monument Securities. 'These euro area auctions will continue to present themselves as market risk events for a very protracted period.' Italy's euro1.9 trillion ($2.42 trillion) in government debt and heavy borrowing needs this year have made it a focal point of the European debt crisis. Italy has passed austerity measures and is on a structural reform course that Premier Mario Monti claims should bring down Italy's high bond yields, which he says are no longer warranted. Analysts have said the successful recent bond auctions were at least in part the work of the ECB, which has inundated banks with cheap loans, giving them ready cash that at least some appear to be using to buy higher-yielding short-term government bonds. Some 523 banks took euro489 billion in credit for up to three years at a current interest cost of 1 percent. ___ Steinhauser contributed from Brussels. AP Business writer David McHugh in Frankfurt contributed.

Forex Weidmann-Bundesbank profit will be crimped by reserves

Forex Weidmann-Bundesbank profit will be crimped by reserves BERLIN (Reuters) - The Bundesbank profit turned over to the federal government will be considerably smaller this year than in 2011 due to the risk provisions linked to the euro zone crisis, central bank president Jens Weidmann was quoted telling Der Spiegel. Weidmann said the German central bank had to raise its reserves due to the greater risks and had consulted with its accountants. In 2012 the Bundesbank had a 2.2 billion euro profit and set aside 1.6 billion for risks. 'The distributed profit will be considerably less than last year,' Weidmann said, without providing any specific numbers. Weidmann also said that he had doubts whether European central banks will be able to make a profit on Greek sovereign bonds that euro zone countries are eager to use as part of the latest Greek bailout. 'It's assumed that the central banks will earn a profit from purchasing the bonds. But that is not certain at all. On the contrary, the balance sheet risks have increased. And that affects not only the Greek bonds but also all the extraordinary monetary measures related to the crisis.' (Reporting By Erik Kirschbaum; Editing by Elaine Hardcastle)

Signals U.S. did not call for strategic oil release: G20 sources

Signals U.S. did not call for strategic oil release: G20 sources U.S. Treasury Secretary Timothy Geithner (C) and Chairman of Grupo Financiero Banorte Guillermo Ortiz (L) arrive to a meeting of Group of Twenty (G20) leading economies' finance ministers and central bankers in Mexico City February 25, 2012. REUTERS/Tomas Bravo MEXICO CITY, Reuters (Feb 25) - The United States did not openly call for a release of countries' strategic oil reserves during Group of 20 meetings this weekend, Group of 20 sources said on Saturday. Treasury Secretary Timothy Geithner said on Friday the United States is considering a release from its strategic oil reserves as rising tensions between Iran and the West over its disputed nuclear program fueled a rise in oil prices. At meeting of G20 economies on Saturday, two people familiar with the discussion said finance officials had discussed the risk to the world economy from oil prices, which rose above $125 a barrel on Friday, but the United States did not push for a release of strategic reserves. Countries hold oil reserves as a buffer against sudden drops in supply. A draft communique for the G20 meeting, which is still under discussion, said high oil prices were a risk to the global economy, the sources said, although the outlook was cautiously optimistic. 'The communique says that there are some positive signs in the global economy, coming especially from the U.S. economy, but they are tentative,' one G20 official said. (Reporting by Francesca Landini and Dave Graham; Writing by Krista Hughes)