Japan PM: Will pursue bold monetary policy, big fiscal spending

 Japanese Prime Minister Shinzo Abe reiterated on Monday his call for bold monetary easing by the central bank, big fiscal spending and an economic growth strategy as steps towards conquering deflation.
"Above all, the urgent task is to beat deflation," Abe told a meeting of officials from the government and ruling parties.
"A bold monetary policy, a flexible fiscal policy and a growth strategy are aimed at stimulating private investment. With these three pillars, we must aim to beat deflation."
Abe also said the government would do its utmost to quickly enact an extra budget for the current fiscal year and a budget for the next fiscal year to shore up the economy.

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Google executive chairman heading to NKorea

BEIJING (AP) — The Google chairman wants a first-hand look at North Korea's economy and social media in his private visit Monday to the communist nation, his delegation said, despite misgivings in Washington over the timing of the trip.
Eric Schmidt, executive chairman of one of the world's biggest Internet companies, is the highest-profile U.S. executive to visit North Korea — a country with notoriously restrictive online policies — since young leader Kim Jong Un took power a year ago.
Schmidt departed Beijing on Monday aboard a flight to Pyongyang with a delegation led by former New Mexico Gov. Bill Richardson, who has traveled more than a half-dozen times to North Korea over the past 20 years. Richardson called the trip a private, humanitarian mission.
"This is not a Google trip, but I'm sure he's interested in some of the economic issues there, the social media aspect. So this is why we are teamed up on this," Richardson said without elaborating on what he meant by the "social media aspect."
"We'll meet with North Korean political leaders. We'll meet with North Korean economic leaders, military. We'll visit some universities. We don't control the visit. They will let us know what the schedule is when we get there," he said.
Richardson also said the delegation plans to inquire about a Korean-American U.S. citizen detained in North Korea.
"We're going to try to inquire the status, see if we can see him, possibly lay the groundwork for him coming home," Richardson said. "I heard from his son who lives in Washington state, who asked me to bring him back. I doubt we can do it on this trip."
The four-day trip, which is taking place just weeks after North Korea fired a satellite into space using a long-range rocket, has drawn criticism from U.S. officials. Washington condemned the Dec. 12 launch, which it considers a test of ballistic missile technology, as a violation of U.N. Security Council resolutions barring Pyongyang from developing its nuclear and missile programs. The Security Council is deliberating whether to take further action.
"We don't think the timing of the visit is helpful, and they are well aware of our views," U.S. State Department spokeswoman Victoria Nuland told reporters last week.
The trip was planned well before North Korea announced its plans to send a satellite into space, two people with knowledge of the delegation's plans told The Associated Press. AP first reported the group's plans last Thursday. Schmidt, a staunch proponent of Internet connectivity and openness, is expected to make a donation during the visit, members of the delegation told AP. They spoke on condition of anonymity, saying they were not authorized to divulge details of the delegation's plans to the media.
The visit is the first by a Google executive to North Korea and comes just days after Kim, who took power following the Dec. 17, 2011, death of his father, Kim Jong Il, laid out a series of policy goals for North Korea in a lengthy New Year's speech. He cited expanding science and technology as a means to improving the country's economy as a key goal for 2013.
Computer and cellphone use is gaining ground in North Korea's larger cities.
However, most North Koreans only have access to a domestic Intranet system, not the World Wide Web. For North Koreans, Internet use is still strictly regulated and allowed only with approval.
Schmidt, who oversaw Google's expansion into a global giant, speaks frequently about the importance of providing people around the world with Internet access and technology.
Google now has offices in more than 40 countries, including all three of North Korea's neighbors: Russia, South Korea and China, another country criticized for systematic Internet censorship.
Accompanying Schmidt is Jared Cohen, a former U.S. State Department policy and planning adviser who heads Google's New York-based think tank. The two collaborated on a book about the Internet's role in shaping society called "The New Digital Age," which comes out in April.

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Global economy: U.S. and China leave feeble Europe in their wake

The economies of the United States, China and much of the developing world have decoupled from Europe, leaving it to wallow in various stages of recession and fiscal disarray.
That is one reason why the key economic event of the coming week will be a European Central Bank meeting almost totally focused on how far policymakers will go to boost growth.
Although there are some signs that a bottom may have been reached in the euro zone's recent economic decline, the pattern of moderate U.S. and Asian growth book-ending feeble Europe is firmly in place for the moment.
Manufacturing surveys published just a few days into 2013 laid out the divide starkly.
The United States and China both came in above the 50 index level that designates growth while the euro zone languished in recessionary territory for the 17th month in a row.
The December U.S. jobs report last Friday also did nothing to dispel the idea of recovery, although the prospect of more wrangling over the U.S. budget still casts a shadow. The dollar has even begun to rise on the distant prospect of an exit from years of stimulus.
"From a growth outlook, it is quite hard for Europe to disappoint," said Michael Metcalfe, responsible for global macro strategy at State Street Global Markets.
He argues that one of the main risks to the current global economic consensus is that there is too much gloom attached to Europe.
ECB MEETS
Most discussion about what the ECB will do at its meeting on Thursday centers on whether it will cut interest rates, something the bank's policymakers discussed last month before opting to hold the refi benchmark at a record low 0.75 percent.
It is an open question among economists about how much use a cut in the refi rate would be. Cutting the deposit rate from zero, meanwhile, would effectively mean charging banks for parking their money.
Part of this refi rate cut talk is because inflation expectations are seen fairly well anchored and because the ECB's own forecasts suggest the euro zone economy will shrink 0.3 percent this year.
"The economic data would support a rate cut," said Sarah Hewin, head of Europe research at Standard Chartered Bank.
The consensus of a Reuters poll in December, however, was for no cut in the first quarter. ECB Executive Board members Yves Mersch and Peter Praet have both dampened expectations of a cut in the main refi rate.
Joerg Asmussen, another ECB board member, also said late last month he would be "very reluctant" about the ECB cutting its deposit rate - now at zero - any further.
Berenberg Bank economist Christian Schulz argues that those against cutting rates have an upper hand at ECB at the moment because ECB President Mario Draghi needs support for his new bond-purchase programme, a backstop to deter investors from selling off debt in countries such as Spain and Italy.
"The commitment to potentially unlimited bond purchases is the key policy tool of the ECB," Schulz wrote in a note.
"To ensure its credibility ... Draghi will have to ensure maximum support for it in the Governing Council, which gives hawks a disproportionate weight and will probably prevent another rate cut to support the economy."
PRICING CHINA
Friday brings China's latest inflation data, once a clear worry for the authorities and financial markets, both of whom feared the economy was growing too fast.
The fact that it is no longer cause for undue concern reflects both the impact of slowing global demand and steady efforts by Beijing to cool things down without a "hard landing" that would have rippled across the world.
Japanese bank Nomura reckons that year-on-year Chinese consumer prices rose 2.2 percent in December, slightly higher than November's 2.0 percent, but way below the peak of 6.5 percent in August 2011.
This would sit well with growth expectations of around 7.7 to 7.8 percent for the year, two full percentage points below growth around two years ago. A soft landing, if you like.
"You had inflation taking off, overheating in real estate and the authorities tightening policy," said Standard Chartered's Hewin.
"(Now) inflation has essentially bottomed out. (The Chinese) authorities are not worried about overheating, nor are they concerned about a hard landing."
"MINI-CLIFF" AHEAD
There is relatively little due from the United States in terms of economic releases, but plenty of issues to chew on.
One is just how widespread the belief is at the Federal Reserve that stimulus should be coming to an end - a surprising discovery in last week's minutes.
The other is the budget. Potential economic disaster was averted at the start of the year with an agreement between the White House and Congress over taxes, avoiding the "fiscal cliff" that threatened huge automatic budget austerity.
But the agreement left many things to be dealt with later.
"In our view, it leaves the door wide open for another debt ceiling fiasco in a matter of weeks, and installed a new "mini-cliff" for government spending in two months," Credit Suisse said in a research note.

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Venezuelan VP says he has visited Chavez twice

CARACAS, Venezuela (AP) — Venezuela's vice president says he has visited ailing President Hugo Chavez twice in Cuba and plans to return home to Caracas.
Vice President Nicolas Maduro says he spoke with Chavez during their visits. Maduro says the president has "the same strength as always," despite a health situation that he described as complex three weeks after his cancer surgery.
Maduro says he will return to Venezuela on Wednesday.
He made the comments in an interview broadcast Tuesday night by the Caracas-based television network Telesur.

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Venezuelans on edge amid shifting news on Chavez

CARACAS, Venezuela (AP) — Supporters and opponents of President Hugo Chavez alike nervously welcomed the new year Tuesday, left on edge by shifting signals from the government about the Venezuelan leader's condition three weeks after cancer surgery in Cuba.
With rumors swirling that Chavez had taken a turn for the worse, Vice President Nicolas Maduro said in a televised interview in Cuba that he had met with the president twice, spoken with him and planned to return to Venezuela on Wednesday.
Maduro said Chavez faces "a complex and delicate situation." But Maduro also said that when he talked with the president and looked at his face, he seemed to have "the same strength as always."
"All the time we've been hoping for his positive evolution. Sometimes he has had light improvements, sometimes stationary situations," Maduro said in the prerecorded interview, which was broadcast Tuesday night by the Caracas-based television network Telesur.
"I was able to see him twice, converse with him. He's totally conscious of the complexity of his post-operative state and he expressly asked us ... to keep the nation informed always, always with the truth, as hard as it may be in certain circumstances," Maduro said.
Chavez has not been seen or heard from since the Dec. 11 operation, and officials have reported a series of ups and downs in his recovery — the most recent, on Sunday, announcing that new complications from a respiratory infection had put the president in a "delicate" state.
Speculation has grown since Maduro announced those latest troubles, which were a sharp shift from his remark nearly a week earlier that the president had been up and walking.
In Tuesday's interview, Maduro did not provide any new details about Chavez's complications. But he joined other Chavez allies in urging Venezuelans to ignore gossip, saying rumors are being spread due to "the hatred of the enemies of Venezuela."
He didn't refer to any rumors in particular, though one of them circulating online had described Chavez as being in a coma.
Political opponents of Chavez have complained that the government hasn't told the country nearly enough about his health.
Maduro's remarks about the president came at the end of an interview in which he praised his government's programs at length, recalled the history of the Cuban revolution and touched on what he called the long-term strength of Chavez's socialist Bolivian Revolution movement.
He mentioned that former Cuban President Fidel Castro had been in the hospital, and praised Cuba's government effusively. "Today we're together on a single path," Maduro said.
Critics in Venezuela sounded off on Twitter while the interview was aired, some saying Maduro sounded like a mouthpiece for the Cuban government. In their online messages, many Chavez opponents criticized a dearth of information provided by Maduro, accusing him of withholding key details about Chavez's condition. Opposition politicians have demanded that the government provide the country with a full medical report.
Even some of his supporters said on Tuesday that they wished they knew more.
"We're distressed by El Comandante's health," said Francisca Fuentes, who was walking through a downtown square with her grandchildren. "I think they aren't telling us the whole truth. It's time for them to speak clearly. It's like when you have a sick relative and the doctor lies to you every once in a while."
Chavez has been fighting an undisclosed type of pelvic cancer since June 2011. He has declined to reveal the precise location of the tumors that have been surgically removed. The president announced on Dec. 8, two month after winning re-election, that his cancer had come back despite previous surgeries, chemotherapy and radiation treatment.
"There's nothing we can do except wait for the government to deign to say how he is really," said Daniel Jimenez, an opposition supporter who was in a square in an affluent Caracas neighborhood.
Jimenez and many other Venezuelans say it seems increasingly unlikely that Chavez can be sworn in as scheduled Jan. 10 for his new term.
Venezuelans rang in 2013 as usual with fireworks raining down all over the capital of Caracas. But some of Chavez's supporters had long faces as they gathered in Bolivar Plaza on Monday night holding pictures of the president. A government-sponsored New Year's Eve celebration there had been called off, and instead his supporters strummed guitars and read poetry in Chavez's honor.
Maduro didn't discuss the upcoming inauguration plans, saying only that he's hopeful Chavez will improve.
Chavez has been in office since 1999 and was re-elected in October, three months after he announced that his latest tests showed him to be cancer-free. If he dies or is unable to continue in office, the Venezuelan Constitution says a new election should be held within 30 days.
Before his operation, Chavez acknowledged he faced risks and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election was necessary.
The vice president said that Chavez "has faced an illness with courage and dignity, and he's there fighting, fighting."
"Someone asked me yesterday by text message: How is the president? And I said, 'With giant strength,'" Maduro said. He recalled taking Chavez by the hand, saying "he squeezed me with gigantic strength as we talked.

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Chavez's VP says ailing leader still 'delicate'

CARACAS, Venezuela (AP) — Venezuela's vice president is returning home Wednesday from a visit with Hugo Chavez in Cuba and says the ailing president's condition remains "delicate" three weeks after his cancer surgery.
With rumors swirling that Chavez had taken a turn for the worse, Vice President Nicolas Maduro said Tuesday that he had met with the president twice and had spoken with him.
"He's totally conscious of the complexity of his post-operative state and he expressly asked us ... to keep the nation informed always, always with the truth, as hard as it may be in certain circumstances," Maduro said in the prerecorded interview in Havana, which was broadcast Tuesday night by the Caracas-based television network Telesur.
Both supporters and opponents of Chavez have been on edge in the past week amid shifting signals from the government about the president's health. Chavez has not been seen or heard from since the Dec. 11 operation, and officials have reported a series of ups and downs in his recovery — the most recent, on Sunday, announcing that he faced new complications from a respiratory infection.
Maduro did not provide any new details about Chavez's complications during Tuesday's interview. But he joined other Chavez allies in urging Venezuelans to ignore gossip, saying rumors were being spread due to "the hatred of the enemies of Venezuela."
He didn't refer to any rumors in particular, though one of them circulating online had described Chavez as being in a coma.
Maduro said Chavez faces "a complex and delicate situation." But Maduro also said that when he talked with the president and looked at his face, he seemed to have "the same strength as always."
"All the time we've been hoping for his positive evolution. Sometimes he has had light improvements, sometimes stationary situations," he said.
Maduro's remarks about the president came at the end of an interview in which he praised Venezuelan government programs at length, recalled the history of the Cuban revolution and touched on what he called the long-term strength of Chavez's socialist Bolivarian Revolution movement.
He mentioned that former Cuban President Fidel Castro had been in the hospital, and praised Cuba's government effusively. "Today we're together on a single path," Maduro said.
Critics in Venezuela sounded off on Twitter while the interview was aired, some saying Maduro sounded like a mouthpiece for the Cuban government. In their messages, many Chavez opponents criticized Maduro for the dearth of information he provided, accusing him of withholding key details about Chavez's condition.
Chavez's political opponents have complained that the government hasn't told the country nearly enough about his health, and have demanded it provide the country with a full medical report.
Even some of his supporters say they wished they knew more.
"We're distressed by El Comandante's health," said Francisca Fuentes, who was walking through a downtown square with her grandchildren Tuesday. "I think they aren't telling us the whole truth. It's time for them to speak clearly. It's like when you have a sick relative and the doctor lies to you every once in a while."
Chavez has been fighting an undisclosed type of pelvic cancer since June 2011. He has declined to reveal the precise location of the tumors that have been surgically removed. The president announced on Dec. 8, two month after winning re-election, that his cancer had come back despite previous surgeries, chemotherapy and radiation treatment.
"There's nothing we can do except wait for the government to deign to say how he is really," said Daniel Jimenez, an opposition supporter who was in a square in an affluent Caracas neighborhood.
Jimenez and many other Venezuelans say it seems increasingly unlikely that Chavez can be sworn in as scheduled Jan. 10 for his new term. If he dies or is unable to continue in office, the Venezuelan Constitution says a new election should be held within 30 days.
Before his operation, Chavez acknowledged he faced risks and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election was necessary.
Maduro didn't discuss the upcoming inauguration plans, saying only that he is hopeful Chavez will improve.
The vice president said that Chavez "has faced an illness with courage and dignity, and he's there fighting, fighting."
"Someone asked me yesterday by text message: How is the president? And I said, 'With giant strength,'" Maduro said. He recalled taking Chavez by the hand: "He squeezed me with gigantic strength as we talked."

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Fed's Plosser: U.S. unemployment to fall under 7 percent by end - 2013

SAN DIEGO (Reuters) - Philadelphia Federal Reserve President Charles Plosser said on Friday that he expected U.S. unemployment to decline to between 6.8 percent and 7.0 percent by the end of this year, helped by economic growth of around 3 percent in both 2013 and 2014.
Plosser also told reporters on the sidelines of the annual meeting of the American Economic Association that he hoped the U.S. central bank would stop buying bonds if the jobless rate indeed fell at this pace, which would bring the level of unemployment close to the Fed's threshold of 6.5 percent.
"Hopefully, if you're getting that close, you will have stopped asset purchases before you get to 6.5 (percent). Otherwise you have really got another problem on your hands," he said. Data released earlier on Friday showed the U.S. unemployment rate held steady at 7.8 percent in December.

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Italy PM Monti says not eyeing role of finance minister in next government

ROME (Reuters) - Outgoing Italian Prime Minister Mario Monti said on Friday he was aiming to lead the next government and he was unlikely to agree to be economy minister in another premier's cabinet after February elections.
"I do not think I would have the motivation to commit myself to serve a government that did not agree with me on at least 98 percent of policy," he said when asked whether he would consider the role of economy minister in an interview on La 7 television.

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Fed's Plosser: U.S. potential growth rate has likely been lowered

SAN DIEGO (Reuters) - Philadelphia Federal Reserve President Charles Plosser said on Friday that the United States had likely suffered a lasting decline in the trend potential growth rate of its economy as a result of the severe 2007-2009 U.S. recession.
"It certainly looks like we've had a permanent shock," he told a panel discussion on the real business cycle during the annual meeting of the American Economics Association. However, he said that it would take a considerable period of time before the data would be able to verify that trend growth had declined.

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Britain extradites al Qaeda suspect to U.S

LONDON (Reuters) - A Pakistani man accused by British authorities of being an al Qaeda operative who took part in a plot to bomb U.S. and English targets was extradited from Britain to the United States on Thursday to face terrorism charges.
Abid Naseer, 26, was one of a dozen men arrested in April 2009 on suspicion of preparing to cause mass casualties by bombing Manchester city centre in northern England.
He and the other suspects were never charged, but Britain said in addition to the alleged Manchester plot, Naseer was part of a wider al Qaeda cell bent on staging attacks in the United States and Norway.
On Thursday, he was taken by counter-terrorism police from a high security prison in east London to Luton airport, north of the British capital, and handed over to U.S. officials.
He is wanted for trial in the United States for his alleged role in planned suicide bomb attacks on New York City subways in 2009, for which a number of men have already been convicted.
He faces three charges: providing material support to a foreign terrorist organisation; conspiracy to provide material support to a foreign terrorist organisation; and conspiracy to use a destructive device.
Naseer and 11 others, mostly students from Pakistan, were arrested in daylight raids in 2009 after Britain's most senior counter-terrorism officer was photographed openly carrying details about the operation.
Britain's then-prime minister, Gordon Brown, said officers were dealing with a "very big terrorist plot", but no explosives were found and all the men were later released as there was not enough evidence to charge them.
Britain's case against them had been based around emails exchanged between Naseer and a Pakistan account believed to be registered to an al Qaeda operative.
British authorities said the emails, which appeared to be discussions about girlfriends and wedding plans, in fact related to ingredients for explosives and they said Naseer posed a serious threat to national security.
The men were ordered to be deported to Pakistan but Naseer won an appeal against the decision because of fears he would be mistreated if he was returned.
He was arrested again in July 2010 when the U.S. warrant was issued, and last month European Court of Human Rights rejected his appeal against the extradition.

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