Stock Market Today

By Chester Yung, Of DOW JONES NEWSWIRES

HONG KONG -(Dow Jones)- Hong Kong’s headline inflation likely eased in Augustfrom a far more than 15-year high in July because of the effect of government reliefmeasures, economists said.

But rising food prices, rentals and other costs will continue to put upwardpressure on consumer prices, with the relief measures set to expire this month,the economists said.

The city’s consumer price index likely rose 5.8% in August from a yearearlier, lower than the 7.9% rise in July, according to the median forecast ofnine economists polled by Dow Jones Newswires.

The government is scheduled to issue the CPI data Thursday at 0830 GMT.

July’s figure, which was the biggest CPI rise since November 1995′s 8.4%increase, was distorted by a waiver on public housing rents that took effect inJuly and August last year but in August and September this yr.

“Removing the effect of the one-off government relief measures, underlyinginflation continues to show upward momentum, intensifying the problem ofnegative real interest rates and lending support to local property prices,” saidANZ economist Raymond Yeung.

“This will trigger a political demand to unpeg the Hong Kong dollar from theU.S. dollar or calls for far more ‘sweeteners’ inside the forthcoming policy address” byHong Kong Chief Executive Donald Tsang, Yeung added.

Donald Tsang is scheduled to announce the final policy address of his term onOct. 12, with measures to tame inflation and property prices likely to be infocus.

Under Hong Kong’s currency board system, the Hong Kong dollar is pegged at HK$7.80 to the U.S. dollar, but is allowed to trade in a range of HK$7.75 to HK$7.85. Hong Kong Financial Secretary John Tsang reiterated final month thegovernment is committed to maintaining the peg.

 Table of forecasts for Hong Kong's August CPI (Percentage change from a yr previously)Bank of East Asia 5.4%HSBC 5.5%Citigroup 5.6%Morgan Stanley 5.7%Credit Agricole CIB 5.8%ING five.8%Hang Seng Bank five.8%Daiwa Capital Markets 6.2%ANZ six.4%Consensus (Median) five.8%July seven.9%

-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com

 (End) Dow Jones Newswires 09-21-110109ET Copyright (c) 2011 Dow Jones & Company, Inc.

— All eyes are on whether Fed will take easing steps in addition to expectedtwist operation

— Dollar may fall further if Fed is aggressive in easing

— Euro’s trend remains downward, possible it to fall below Y89.0, analystsays

By Takashi Mochizuki

Of DOW JONES NEWSWIRES

TOKYO -(Dow Jones)- The dollar fell to a one-month-low against the yen onWednesday in Asia as investors speculate that the Federal Reserve will beaggressive in easing its policies to prop up the world’s largest economy.

At the closely-watched Federal Open Market Committee meeting that ends laterin the global day, investors will be focused on whether the Fed will take easingsteps in addition to much-awaited “Operation Twist, which is about sellingshort-term Treasury bonds and buying long-term ones.

Expected easing measures include cutting its key interest rates which islikely to push the greenback even lower, said Toshihiko Sakai, a senior managerat Mitsubishi UFJ Trust and Banking.

The high expectations for the Fed’s aggressive easing actions mean marketparticipants will be disappointed if the Fed only takes the twist operation,Sakai said. That will result in higher Treasury yields and gains within the dollar.

As of 0450GMT, the dollar was at Y76.34 from Y76.46 in New York Tuesday afterhitting the one-month low of Y76.11.

The euro was at $1.3719 from $1.3703 and Y104.73 from Y104.76.

The euro’s trend remains downward due to Europe’s sovereign debt crisis,dealers in Tokyo noted. The common currency may fall below Y89.00 if it breachesbelow a psychologically important mark of Y100.00, said Barclays Capital’s chiefJapan currency strategist Masafumi Yamamoto.

He added it’s worth paying attention to whether Japan is really going to buymore European bonds after Prime Minister Yoshihiko Noda told Wall Street Journalin an interview that “Japan needs to make a certain contribution going forward.”

If Japan goes ahead, how to fund the purchase would attract investors’attention, Yamamoto said, adding selling the yen for the euro would be oneoption.

Still, Tokyo dealers said that way is still not a mainstream idea, adding themost-likely scenario would be using the euros that Japan already has.

The ICE Dollar Index, which tracks the U.S. dollar against a basket ofcurrencies, was at about 76.93 from 77.021.

Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT Latest Previous %Chg Daily Daily %Chg 2150 GMT High Low 12/31Dollar RatesUSD/JPY Japan 76.32-34 76.44-47 -0.16 76.78 76.12 -5.90EUR/USD Euro 1.3717-20 one.3699-703 +0.13 1.3722 1.3682 +2.45GBP/USD U.K. 1.5731-36 one.5733-38 -0.01 one.5746 1.5728 +0.80USD/CHF Switzerland 0.8898-908 0.8870-84 +0.29 0.8981 0.8698 -4.78USD/CAD Canada 0.9927-32 0.9923-28 +0.04 0.9945 0.9912 -0.18AUD/USD Australia 1.0282-88 one.0273-78 +0.09 1.0290 1.0236 +0.50NZD/USD New Zealand 0.8226-32 0.8238-44 -0.15 0.8245 0.8212 +5.55Euro RateEUR/JPY Japan 104.70-76 104.71-78 -0.02 105.15 104.38 -3.59

-By Takashi Mochizuki, Dow Jones Newswires; 813-6269-2782; takashi.mochizuki@dowjones.com

 (End) Dow Jones Newswires 09-21-110125ET Copyright (do) 2011 Dow Jones & Company, Inc.

— All eyes are on whether Fed will take easing steps in addition to expectedtwist operation

— Dollar may fall further if Fed is aggressive in easing

— Euro’s trend remains downward, possible it to fall below Y89.0, analystsays

By Takashi Mochizuki

Of DOW JONES NEWSWIRES

TOKYO -(Dow Jones)- The dollar fell to a one-month-low against the yen onWednesday in Asia as investors speculate that the Federal Reserve will beaggressive in easing its policies to prop up the world’s largest economy.

At the closely-watched Federal Open Market Committee meeting that ends laterin the global day, investors will be focused on whether the Fed will take easingsteps in addition to much-awaited “Operation Twist, which is about sellingshort-term Treasury bonds and buying long-term ones.

Expected easing measures include cutting its key interest rates which islikely to push the greenback even lower, said Toshihiko Sakai, a senior managerat Mitsubishi UFJ Trust and Banking.

The high expectations for the Fed’s aggressive easing actions mean marketparticipants will be disappointed if the Fed only takes the twist operation,Sakai said. That will result in higher Treasury yields and gains within the dollar.

As of 0450GMT, the dollar was at Y76.34 from Y76.46 in New York Tuesday afterhitting the one-month low of Y76.11.

The euro was at $1.3719 from $1.3703 and Y104.73 from Y104.76.

The euro’s trend remains downward due to Europe’s sovereign debt crisis,dealers in Tokyo noted. The common currency may fall below Y89.00 if it breachesbelow a psychologically important mark of Y100.00, said Barclays Capital’s chiefJapan currency strategist Masafumi Yamamoto.

He added it’s worth paying attention to whether Japan is really going to buymore European bonds after Prime Minister Yoshihiko Noda told Wall Street Journalin an interview that “Japan needs to make a certain contribution going forward.”

If Japan goes ahead, how to fund the purchase would attract investors’attention, Yamamoto said, adding selling the yen for the euro would be oneoption.

Still, Tokyo dealers said that way is still not a mainstream idea, adding themost-likely scenario would be using the euros that Japan already has.

The ICE Dollar Index, which tracks the U.S. dollar against a basket ofcurrencies, was at about 76.93 from 77.021.

Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT Latest Previous %Chg Daily Daily %Chg 2150 GMT High Low 12/31Dollar RatesUSD/JPY Japan 76.32-34 76.44-47 -0.16 76.78 76.12 -5.90EUR/USD Euro 1.3717-20 one.3699-703 +0.13 1.3722 1.3682 +2.45GBP/USD U.K. 1.5731-36 one.5733-38 -0.01 one.5746 1.5728 +0.80USD/CHF Switzerland 0.8898-908 0.8870-84 +0.29 0.8981 0.8698 -4.78USD/CAD Canada 0.9927-32 0.9923-28 +0.04 0.9945 0.9912 -0.18AUD/USD Australia 1.0282-88 one.0273-78 +0.09 1.0290 1.0236 +0.50NZD/USD New Zealand 0.8226-32 0.8238-44 -0.15 0.8245 0.8212 +5.55Euro RateEUR/JPY Japan 104.70-76 104.71-78 -0.02 105.15 104.38 -3.59

-By Takashi Mochizuki, Dow Jones Newswires; 813-6269-2782; takashi.mochizuki@dowjones.com

 (End) Dow Jones Newswires 09-21-110125ET Copyright (do) 2011 Dow Jones & Company, Inc.

 At 0600 GMT Change TFX Jun 3-Mos Euroyen Price: 99.700 Unchanged TSE Dec 10-Yr JGB Futures Price: 142.73 Unchanged 10-Yr one.1% JGB No. 317 Yield: 0.985 -0.005

TOKYO -(Dow Jones)- Japanese government bond futures were unchanged in Tokyoon Wednesday in thin trade ahead of the outcome later of a meeting of the U.S.Federal Reserve’s policy-setting Open Market Committee.

The lead December futures contract closed flat at 142.73, while the benchmark10-year JGB yield was down 0.5 basis point at 0.985%.

Many investors expect the Fed will announce steps to sell short maturities anduse the proceeds to buy long-term debt to flatten the yield curve, a programdubbed Operation Twist. Anticipation of such a move has buoyed Treasurys, andJGBs by extension. Some analysts said if the Fed does unveil such steps, bondscould fall as investors take profits.

“Selling could emerge due to a lack of buy catalysts as the market appears tobe anticipating this move,” said Deutsche Securities strategist MakotoYamashita.

But selling should be limited, Yamashita said, as Japanese market participantsmay reinvest funds from redemptions ahead of the Japanese fiscal yr secondhalf, starting October one. That could help push the benchmark 10-year yield aslow as 0.800% within the near term, he said.

Renewed yen strength is also burnishing the appeal of safe-haven JGBs. Thedollar dropped Wednesday to a one-month low at Y76.11, bringing it near thepost-World War II low of Y75.94 hit on Aug. 19.

“This point also makes it difficult to sell within the bond market,” said TetsuyaMiura, chief market analyst at Mizuho Securities.

Longer-term risks still lurk for JGBs, though, analysts said. Investors areconcerned Tokyo lacks the political wherewithal to effectively tackle itsmassive debt problem, despite Prime Minister Yoshihiko Noda’s fiscalhawkishness.

“Continuing political bickering and apparent lack of political will” arecasting doubt on Tokyo’s pledge to cut its primary deficit to 3% of grossdomestic product in 2015, Societe Generale said in a report.

Fiscal concerns could come to the fore just as life insurance companies, themain buyers of long-dated JGBs, scale back their purchases in around 6 years,as they will likely have corrected by then the current mismatch in theirduration profiles, Societe Generale said.

“Six years can be viewed as a long time for financial markets, but it won’t belong enough for Japan to fix its public debt problem,” the house said.

 Other Cash Bond Yields At 0600 GMT Change 2-Year 0.2% JGB No. 308 Yield: 0.130% Unchanged 5-Year 0.3% JGB No. 98 Yield: 0.345% +0.010 20-Year 1.9% JGB No. 129 Yield: 1.725% -0.010 30-Year 2.0% JGB No. 35 Yield: one.900% -0.005

-By Andrew Monahan, Dow Jones Newswires; 81-3-6269-2783; andrew.monahan@dowjones.com

 (Finish) Dow Jones Newswires 09-21-110233ET Copyright (c) 2011 Dow Jones & Company, Inc.

 At 0600 GMT Change TFX Jun 3-Mos Euroyen Price: 99.700 Unchanged TSE Dec 10-Yr JGB Futures Price: 142.73 Unchanged 10-Yr one.1% JGB No. 317 Yield: 0.985 -0.005

TOKYO -(Dow Jones)- Japanese government bond futures were unchanged in Tokyoon Wednesday in thin trade ahead of the outcome later of a meeting of the U.S.Federal Reserve’s policy-setting Open Market Committee.

The lead December futures contract closed flat at 142.73, while the benchmark10-year JGB yield was down 0.5 basis point at 0.985%.

Many investors expect the Fed will announce steps to sell short maturities anduse the proceeds to buy long-term debt to flatten the yield curve, a programdubbed Operation Twist. Anticipation of such a move has buoyed Treasurys, andJGBs by extension. Some analysts said if the Fed does unveil such steps, bondscould fall as investors take profits.

“Selling could emerge due to a lack of buy catalysts as the market appears tobe anticipating this move,” said Deutsche Securities strategist MakotoYamashita.

But selling should be limited, Yamashita said, as Japanese market participantsmay reinvest funds from redemptions ahead of the Japanese fiscal yr secondhalf, starting October one. That could help push the benchmark 10-year yield aslow as 0.800% within the near term, he said.

Renewed yen strength is also burnishing the appeal of safe-haven JGBs. Thedollar dropped Wednesday to a one-month low at Y76.11, bringing it near thepost-World War II low of Y75.94 hit on Aug. 19.

“This point also makes it difficult to sell within the bond market,” said TetsuyaMiura, chief market analyst at Mizuho Securities.

Longer-term risks still lurk for JGBs, though, analysts said. Investors areconcerned Tokyo lacks the political wherewithal to effectively tackle itsmassive debt problem, despite Prime Minister Yoshihiko Noda’s fiscalhawkishness.

“Continuing political bickering and apparent lack of political will” arecasting doubt on Tokyo’s pledge to cut its primary deficit to 3% of grossdomestic product in 2015, Societe Generale said in a report.

Fiscal concerns could come to the fore just as life insurance companies, themain buyers of long-dated JGBs, scale back their purchases in around 6 years,as they will likely have corrected by then the current mismatch in theirduration profiles, Societe Generale said.

“Six years can be viewed as a long time for financial markets, but it won’t belong enough for Japan to fix its public debt problem,” the house said.

 Other Cash Bond Yields At 0600 GMT Change 2-Year 0.2% JGB No. 308 Yield: 0.130% Unchanged 5-Year 0.3% JGB No. 98 Yield: 0.345% +0.010 20-Year 1.9% JGB No. 129 Yield: 1.725% -0.010 30-Year 2.0% JGB No. 35 Yield: one.900% -0.005

-By Andrew Monahan, Dow Jones Newswires; 81-3-6269-2783; andrew.monahan@dowjones.com

 (Finish) Dow Jones Newswires 09-21-110233ET Copyright (c) 2011 Dow Jones & Company, Inc.