Japan Opposition Party to Endorse Tax Hike

TOKYO --The opposition Liberal Democratic Party will accept the government's proposed two-step consumption tax increase, aligning itself with the ruling Democratic Party of Japan on the heart of Prime Minister Yoshihiko Noda's package of tax and social security reforms, the Nikkei reported in its Friday morning edition.

On Thursday, LDP policy committee leaders settled on a party line on the tax issue ahead of three-way talks on revising the proposed reform legislation. The party will agree to raise the consumption tax in two stages: first from 5% to 8% in April 2014, then to 10% in October 2015.

The three biggest parties in the Diet--the DPJ, the LDP and the opposition New Komeito--will begin negotiations Friday, aiming to reach a deal by June 15 and vote on the bills in the lower house by June 21, when the legislative session ends.

They will tackle taxes and social security separately, starting with the latter, an issue on which the DPJ and LDP stand further apart. The LDP wants the DPJ to drop some of its defining social security proposals, such as creating a guaranteed minimum pension and eliminating the separate health insurance bracket for the elderly. Should they fail to reach a compromise there, an agreement on the tax hike may fall through.

On the tax hike, the LDP will call for a provision giving the final say to the sitting government six months before the first stage of the tax increase. At the same time, it seeks to drop economic growth targets linked to the tax hike, arguing they would tie the hands of future governments.

To cushion the impact on low-income Japanese, the government and the DPJ are considering an initial round of cash payments, followed in the longer term by refundable tax credits. The LDP is cool to both proposals and will try to push for more targeted, temporary measures.

Despite their rhetoric, both parties had already seen eye to eye on raising the tax to 10%. The LDP has concluded that agreeing to the basic structure of the DPJ's proposed tax hike offers the fastest way to that end. New Komeito, meanwhile, is more likely to accept the parts of the plan that the other two parties agree on.
06-07-12 1920ET

(END) Dow Jones Newswires
June 07, 2012 19:45 ET (23:45 GMT)

UK's Osborne Signals Idea of EU Membership Vote

George Osborne, the U.K. chancellor of the exchequer, became the first senior minister to signal the possibility of a referendum on membership in the European Union, U.K. daily The Times reported Friday.
In doing so, the chancellor surprised Downing Street and set himself on a collision course with his Liberal Democrat coalition partners, the Times said.
Mr. Osborne said a plan to rescue the single currency was likely to mean handing more powers to Brussels, The Times said. This would automatically trigger a referendum under a new law introduced by the coalition, The Times said.
"I think what the public are concerned about, the British people would be concerned about, would be if there was any transfer of power," Mr Osborne said, according to the Times. "A reshaped relationship with Europe would imply, would involve, a transfer of sovereignty or powers from the U.K. to Brussels."
His remark appeared to overstep the agreed coalition position, The Times said. The newspaper noted that Prime Minister David Cameron was more cautious on a visit to Berlin for talks with Angela Merkel, the German chancellor, saying that you need a referendum if you "change the rules of the game".
Newspaper Web site: http://thetimes.co.uk

China Yuan Official Central Parity Rates for Friday

The China Foreign Exchange Trade System published the following official central parity rates for major currencies against the yuan Friday:

 
            Friday    Thursday 
USD/CNY     6.3188     6.3170 
HKD/CNY     0.81446    0.81419 
JPY/CNY*    7.9495     7.9757 
EUR/CNY     7.9222     7.9427 
GBP/CNY     9.8005     9.7784 
AUD/CNY     6.2335     6.2554 
CAD/CNY     6.1359     6.1411 
CNY/MYR     0.50055    0.50015 
CNY/RUB     5.1202     5.1012 
 
*per 100 yen 
 

The daily central parity rate for the yuan versus the U.S. dollar is the weighted average of prices given by market makers. The highest and lowest offers are excluded from the calculation.
In each daily trading session, the central bank allows the dollar/yuan rate to move no more than 1% above or below the central parity rate, and the yuan/ringgit and yuan/ruble to move no more than 5%. It allows other currency pairs to move as much as 3% above or below the central parity rate.

Source: www.chinamoney.com.cn

Write to djnews.shanghai@dowjones.com

(END) Dow Jones Newswires
June 07, 2012 21:17 ET (01:17 GMT)

Interbank Foreign Exchange Rates At 20:50 EST / 0050 GMT

                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
 
USD/JPY Japan            79.64-68       79.61-65  +0.04    79.75    79.58  +3.57 
EUR/USD Euro            1.2539-42      1.2559-63  -0.16   1.2575   1.2530  -3.24 
GBP/USD U.K.            1.5509-14      1.5525-31  -0.11   1.5536   1.5500  -0.20 
USD/CHF Switzerland     0.9574-78      0.9559-64  +0.15   0.9585   0.9552  +2.17 
USD/CAD Canada          1.0293-98      1.0276-81  +0.17   1.0300   1.0240  +0.84 
AUD/USD Australia       0.9870-74      0.9895-98  -0.24   0.9917   0.9858  -3.29 
NZD/USD New Zealand     0.7656-58      0.7669-74  -0.19   0.7688   0.7646  -1.53 
 
Euro Rates 
 
EUR/JPY Japan            99.87-92      99.99-100  -0.12   100.26    99.74  +0.34 
EUR/GBP U.K.            0.8085-88      0.8088-91  -0.04   0.8097   0.8082  -4.38 
EUR/CHF Switzerland     1.2008-12      1.2008-13   0.00   1.2011   1.2010  -1.33 
EUR/CAD Canada          1.2906-14      1.2906-15  -0.01   1.2918   1.2868  -2.43 
EUR/AUD Australia       1.2701-08      1.2689-96  +0.09   1.2713   1.2676  +0.07 
EUR/DKK Denmark         7.4320-58      7.4317-57  +0.00   7.4388   7.4314  -0.02 
EUR/NOK Norway        7.5969-6044     7.5890-988  +0.09   7.6035   7.5868  -1.87 
EUR/SEK Sweden          8.9704-74     8.9688-832  -0.02   8.9868   8.9610  +0.64 
EUR/CZK Czech Rep.     25.259-304      25.313-71  -0.24   25.352   25.292  -1.23 
EUR/HUF Hungary       295.70-6.38    294.88-5.67  +0.26   296.00   295.38  -6.05 
EUR/PLN Poland         4.2666-724     4.2637-716  +0.04   4.2693   4.2642  -4.43 
 
Yen Rates 
 
AUD/JPY Australia        78.60-66       78.77-83  -0.22    79.08    78.50  +0.52 
GBP/JPY U.K.            123.51-62      123.59-68  -0.06   123.82   123.38  +3.36 
CAD/JPY Canada           77.34-41       77.43-50  -0.12    77.82    77.28  +2.71 
NZD/JPY New Zealand    60.97-1.02       61.05-12  -0.15    61.31    60.87  +1.98 
 
Other Dollar Rates 
 
USD/CZK Czech Rep.      20.142-76      20.153-97  -0.08   20.171   20.140  +2.06 
USD/HUF Hungary       235.81-6.32    234.78-5.37  +0.42   236.13   235.16  -2.91 
USD/DKK Denmark         5.9265-86      5.9171-93  +0.16   5.9327   5.9118  +3.32 
USD/NOK Norway         6.0581-632      6.0423-90  +0.25   6.0677   6.0376  +1.41 
USD/PLZ Poland          3.4023-64    3.3947-4005  +0.20   3.4059   3.3930  -1.24 
USD/RUB Russia          32.409-60     32.352-424  +0.14   32.472   32.282  +0.88 
USD/SEK Sweden          7.1533-78     7.1407-512  +0.13   7.1579   7.1328  +4.01 
USD/ZAR S. Africa      8.3868-994     8.3688-832  +0.20   8.4149   8.3768  +3.78 
 
USD/CNY China          6.3693-714      6.3671-92  +0.03   6.3693   6.3690  +0.81 
USD/HKD Hong Kong       7.7580-86      7.7579-85  +0.00   7.7584   7.7580  -0.11 
USD/MYR Malaysia       3.1685-786     3.1575-640  +0.40   3.1750   3.1620  -0.12 
USD/INR India           54.938-53      54.958-73  -0.04   54.958   54.900  +3.62 
USD/IDR Indonesia        9355-405        9340-99  +0.11     9400     9405  +3.84 
USD/PHP Philippines    43.075-276     43.033-272  +0.05   43.075   43.150  -1.54 
USD/SGD Singapore       1.2789-92      1.2770-75  +0.14   1.2805   1.2764  -1.35 
USD/KRW S. Korea     1170.29-2.70   1163.59-6.00  +0.58  1171.39  1165.60  +0.94 
USD/TWD Taiwan         29.799-860     29.779-840  +0.07   29.819   29.860  -1.44 
USD/THB Thailand        31.738-94      31.634-90  +0.33   31.765   31.528  +0.53 
USD/VND Vietnam        20740-1387     20965-1050  +0.27    20740    21387  +0.12 
 
USD/BRR Brazil         2.0295-360      2.0349-80  -0.18   2.0351   2.0348  +8.96 
USD/MXN Mexico        14.0693-862    14.0637-727  +0.07  14.0814  14.0626  +0.94 
USD/ARS Argentina      4.4792-864     4.4792-864   0.00   4.4812   4.4856  +4.04 
 
Source: ICAP Plc. 
 

(END) Dow Jones Newswires
June 07, 2012 20:50 ET (00:50 GMT)

Daily Forex Brief London: Thursday 7th June 2012

Global policy-makers get the message

Rattled by May's market madness, global policy-makers have finally started to show that they get the message, although their words will need to be followed by strong action before too long. Although the ECB was not decisive enough for our liking given the gravity of the situation in Europe (see below), at least Mario Draghi promised to act if the growth outlook worsened. Fed Vice-Chairman Janet Yellen conceded last night that the American economy was 'vulnerable to setbacks' and might require additional stimulus: Fed Chairman Bernanke will likely reinforce this point when he testifies to the Joint Economic Committee later today (see below). China in particular has implemented significant extra stimulus over recent weeks in response to their worsening growth performance; India has vowed to raise infrastructure spending to boost their ailing economy; and the RBA has lowered rates by 75bp over the past six weeks. Also, the BOE could decide to expand their asset purchases program when they meet this morning (see below). In response, the major American and European bourses were up more than 2% yesterday, Brent is back above USD 100 a barrel, and both the yen and the dollar have given back some of their recent gains. The euro suddenly looks a little perkier, notwithstanding ongoing concerns over both Greece and Spain.