from: http://www.aci.net/kalliste Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Interest Rates Japan Zero-Interest-Rate Policy at End? Speculation causes yen to rise again. Masaru Hayami, Bank of Japan governor, on Wednesday indicated that the country's near zero-rate interest policy might end before the end of the year. His comments at a regular monthly press conference caused a brief surge in the yen against the dollar and euro. An end to the BoJ's policy of near-zero interest rates towards the end of the year has been widely predicted, but this was the first time Mr Hayami had given a hint of its possible timing. His statement was given additional weight because it followed a significantly more upbeat assessment of the Japanese economy by the BoJ. The yen jumped from ¥106.9 against the dollar at the end of Tokyo trading on Tuesday to ¥105.4 at Wednesday's close. "The market would not be incorrect in interpreting an end to the zero-rate policy before the year end," said Mr Hayami. "We cannot continue the zero-rate interest policy forever. It is only natural to rectify the abnormal policy of having zero interest rates." An end to the near zero-rate policy would not mean a tightening of monetary policy, according to Mr Hayami. A 25 basis point increase in the overnight call rate had already been priced into the market, said Tetsufumi Yamakawa, chief economist at Goldman Sachs in Tokyo. It did not mean the more important official discount rate would have to be increased from its current 0.5 per cent. Analysts said Mr Hayami might have made his comments to test the market's reaction to an eventual tightening in monetary policy. Nevertheless, they expressed surprise at the timing of his statement. The Japanese government had been lobbying for a statement expressing concern about the yen's strength after Saturday's gathering in Washington of finance ministers from the Group of Seven nations. Mr Hayami's comments had the effect of boosting the yen's value. A sharp appreciation of the Japanese currency could stifle the economy's stuttering recovery. The Financial Times, April 13, 2000 America's Enemies Unite Israel Welcomes Chinese President Hey China! Have we got an arms deal for you! JERUSALEM (AP) -- Cementing ties forged in secret nearly two decades ago, Chinese President Jiang Zemin is touring Israel on a historic visit overshadowed only by U.S. pressure to cancel a lucrative Israeli-Chinese arms deal. The high-profile recognition of Israel by one of the world's major powers has Israel caught between its strongest ally and a powerful new friend. Israel Prime Minister Ehud Barak welcomed Jiang on Wednesday, less than 24 hours after meeting President Clinton at the White House. Clinton urged the Israeli leader to cancel the planned sale of a sophisticated airborne surveillance system to China. Clinton expressed deep displeasure and warned that the deal, potentially worth $2 billion, could undermine Israel's standing in the United States, said an Israeli official who attended Tuesday's meeting. However, Israeli Deputy Defense Minister Ephraim Sneh said Israel was committed to selling at least one surveillance plane to China, which reportedly has the option to order three to seven more. Israeli officials have suggested that after the first plane is delivered, the deal could be frozen indefinitely to appease the United States. Sneh scoffed at U.S. complaints that the sale could upset the military balance in Asia and pose a threat to Taiwan, a U.S. ally. Israel's arms sales to China date back to secret deals in the early 1980s, well before the two countries established diplomatic relations in 1992. Jiang, who is on a six-day trip, is the first Chinese president to visit Israel. At a reception hosted by Israeli President Ezer Weizman, Jiang said it was important to ''strengthen the historical friendship between us ... and to promote friendly and mutually beneficial cooperation in various fields between the two countries.'' Jiang is particularly interested in Israeli agricultural technology and will tour farms in southern Israel. He was to visit Israel's Yad Vashem Holocaust memorial and parliament and meet Barak later today. A planned visit to Israel Aircraft Industries, which is outfitting a Soviet transport plane with the new surveillance system, has reportedly been canceled to avoid drawing more attention to the deal. Barak faces a difficult dilemma over the sale. He needs Clinton's goodwill at a critical stage in the peace talks with the Palestinians and for a planned Israeli withdrawal from Lebanon, due by July. But with unemployment at a high, Barak also has to protect Israel's defense industry, and China has emerged as a major client. Jiang said Wednesday that with the end of the Cold War, superpowers no longer controlled world affairs -- a veiled admonishment to the United States to stay out of the deal. ''It has become increasingly difficult,'' he said, ''for the very few big powers or blocs of big powers to monopolize international affairs and control the fate of other countries.'' Israeli Foreign Minister David Levy said the dispute with the United States was ''not a real crisis'' and would be resolved. Associated Press, April 13, 2000 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations. Omnia Bona Bonis, Adieu, Adios, Aloha. Amen. Roads End <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! 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