Finance Blog number 1

A Macau casino operator controlled by U.S. billionaire Sheldon Adelson’s Las Vegas Sands Corp. said Thursday it’s being investigated by Hong Kong financial regulators.

Sands China Ltd. said it’s being probed over “alleged breaches” of financial regulations by the city’s Securities and Futures Commission, which has asked for “certain documents.” It said it was “not permitted to comment further at this time.”

It made the announcement in a brief statement to the Hong Kong stock exchange, where its shares are traded.

Sands China is one of six companies licensed to operate casinos in Macau, the world’s most lucrative gambling market.

Earlier this month, Las Vegas Sands said it had received a subpoena from the Securities and Exchange Commission and is under investigation by the U.S. Department of Justice over allegations made by a former executive.

It’s unclear if the Hong Kong investigation is related to the U.S. probe.

Las Vegas Sands said in a regulatory filing that it received the SEC subpoena on Feb payday loans lenders. 9. The subpoena requests documents relating to Las Vegas Sands’ compliance with the Foreign Corrupt Practices Act. The casino operator said it believes the subpoena was prompted by allegations made in a lawsuit filed last fall by former Sands China CEO Steve Jacobs.

Las Vegas Sands said it plans to cooperate with the investigations and vigorously defend itself against Jacobs’ lawsuit. Jacobs alleges breach of contract, among other things, in the suit filed in October and is seeking unspecified damages.

Jacobs has accused the company and CEO Adelson of demanding he engage in illegal activity. Sands has said Jacobs was fired for making unauthorized deals and violating company policy.

Sands China operates owns the Venetian Macao, Sands Macao and Four Seasons Hotel Macao.

Sands China shares fell 6 percent to $17.30 Hong Kong dollars by late afternoon.

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Bell Canada has backed off a unpopular plan to make small, independent Internet service providers, which lease space on its network, apply caps on individual Internet use.

The unit of BCE Inc. said Monday it will propose an alternative scheme for the imposition of usage fees on independent ISPs, a move observers say could help keep a lid on Internet costs for consumers.

Bell

Treasuries rose as Japan’s nuclear crisis worsened, the U.S. and its allies prepared to attack Muammar Qaddafi’s ground forces in Libya, and speculation intensified that Portugal will need a bailout.

U.S. debt extended its advance after a government report showed new home sales unexpectedly fell. The five-year note yield dropped for the first time in a week on demand for a refuge after Japan said people in Tokyo should avoid giving tap water to infants and as workers struggled to reconnect power to a nuclear reactor damaged by the March 11 earthquake.

“You have to respect the headline risk still out there with all of the uncertainty coming from Asia, the Middle East and Europe, which is giving the market a bid,” said Paul Horrmann, a broker in New York at Tradition Asiel Securities Inc., an interdealer broker.

The yield on the benchmark 10-year note dropped five basis points, or 0.05 percentage point, to 3.28 percent at 10:20 a.m. in New York, according to Bloomberg Bond Trader prices. The price of the 3.625 percent note maturing in February 2021 rose 3/8, or $3.75 per $1,000 face amount, to 102 27/32.

Five-year note yields decreased four basis points to 2 percent, while yields on two-year notes were two basis points lower at 0.63 percent. Yields on 30-year bonds slid four basis points to 4.40 percent.

Yields on Portugal’s and Ireland’s debt rose to record highs on concern euro-area leaders are struggling to find a comprehensive solution to the region’s debt crisis. Stocks fell, pushing the Standard & Poor’s 500 Index down 0.7 percent.

Radiation Levels

Treasuries rose as radiation levels at Japan’s Fukushima Dai-Ichi nuclear power plant hampered efforts to repair reactors and a U.S.-led alliance considered attacking Qaddafi’s ground forces to augment the no-fly zone imposed in Libya.

Portugal’s Prime Minister Jose Socrates faces a vote in parliament today against his deficit-cutting plan that threatens to push the country toward early elections and the need for a European Union bailout.

The nation’s government may collapse, Nicola Mai, a JPMorgan Chase & Co. economist in London, said in a research note to clients yesterday.

“The likelihood that the Portuguese government will fall this week looks high,” Mai wrote. “This suggests that the sovereign will likely access” the European Union’s rescue fund “in the near term, despite the current government’s efforts to avoid this outcome.”

U.S. Housing

Treasuries extended their gains as the Commerce Department reported that purchases of new homes fell 16.9 percent in February after slumping almost 9.6 percent in the previous month. The median forecast of 77 economists in a Bloomberg News survey was for an increase of 2.1 percent.

The U.S. economy grew at a 3 percent annual rate in the fourth quarter, according to the median forecast of 81 economists in a Bloomberg News survey before the Commerce Department’s report on March 25. The government reported last month a 2.8 percent pace of expansion.

The difference between yields on 10-year notes and Treasury Inflation Protected Securities, or TIPS, has narrowed to 2.39 percentage points from 2.57 percentage points on March 8, which was the widest since 2008. The spread, known as the break-even rate, is a gauge of expectations for consumer prices over the life of the debt.

The 10-year note yield will advance to 3.92 percent by year-end, according to the average forecast in a Bloomberg survey of financial companies, with the most recent forecasts given the heaviest weightings.

Fed’s Outlook

The Federal Reserve said following its March 15 meeting that “conditions in the labor market appear to be improving gradually” and higher energy prices will have a temporary effect while reaffirming its plan to buy $600 billion of Treasuries through June to keep borrowing costs low.

Dallas Fed President Richard W. Fisher said today in a speech in Berlin that he sees “extraordinary speculative activity” in the U.S. after the central bank pumped record amounts of stimulus into the economy.

Fisher, who votes on monetary policy this year, reiterated his view that no further monetary stimulus will be needed after the Fed finishes its planned debt purchases.

The central bank is scheduled to purchase $6.5 billion to $8.5 billion of debt maturing from May 2018 to February 2021 today, according to the New York Fed’s website.

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U.S. stocks rallied for a third day on Monday, as fears about Japan’s damaged nuclear plants eased and investors cheered a huge merger in the telecommunications industry.

The Dow Jones industrial average (INDU) jumped 178 points, or 1.5%, to 12,037. It’s the first time the Dow has closed above the 12,000-point mark since the day of the Japanese earthquake on March 11.

The S&P 500 (SPX) index added 19.2 points, or 1.5%, to 1,298; and the tech-heavy Nasdaq (COMP) gained 48 points, or 1.8%, 2,692.

Stocks spiked at the open Monday, and remained steadily higher throughout the session.

Investors rallied on positive news regarding Japan’s nuclear crisis, as well as AT&T’s $39 billion deal to acquire T-Mobile USA. Shares of AT&T (T, Fortune 500) and Verizon Communications (VZ, Fortune 500) closed up more than 1%, although both companies pared back some of their earlier gains.

"Mergers are always a shot of adrenaline for investors, because it shows that corporate insiders still see value, despite this two-year bull market," said Fred Dickson, chief market strategist at D.A. Davidson & Co.

Shares of AT&T’s smaller competitor Sprint Nextel (S, Fortune 500), which had been reported to be in talks with Deutsche Telekom, fell 14%, making it the worst performer on the S&P 500.

Aside from corporate news, investors continue to react to developments in Japan and Libya.

Over the weekend, Japanese engineers made progress in cooling nuclear reactors that had overheated, following the devastating earthquake and tsunami that struck the country March 11.

Meanwhile, turmoil in North Africa heated up. The United States and its allies launched an airstrike on Libyan military targets Monday, in an effort to subdue forces of Libyan leader Moammar Gadhafi no fax cash loans.

Oil prices jumped more than $1 a barrel in electronic trading, following the attack. (CNN.com coverage of Libya)

"The fear of a Middle East contagion and a horrible nuclear calamity in Japan has abated, and the good news is that the economy and market fundamentals have returned to the forefront," said Paul Zemsky, head of asset allocation with ING Investment Management.

U.S. stocks ended higher Friday, but the ongoing turmoil in Japan led indexes to end lower for the week.

Economy: The National Association of Realtors said existing home sales fell to an annual rate of 4.88 million in February, which was much lower than the 5.05 million most economists forecasted.

Companies: Citigroup (C, Fortune 500) shares fell 1.6% after the bank announced a 1-for-10 reverse stock split and said it plans to reinstate its quarterly dividend.

Tiffany & Co. (TIF) shares rose 5% after the luxury retailer reported a stronger-than-expected profit.

World markets: European stocks closed broadly higher. The DAX in Germany gained 2.3%, France’s CAC 40 rose 2.5%, and Britain’s FTSE 100 added 1.2%.

Asian markets ended higher. The Shanghai Composite ticked up less than 0.1%, while the Hang Seng in Hong Kong added 1.7%. Japanese markets were closed for a national holiday.

Currencies and commodities: The dollar gained against the euro and the Japanese yen, but was flat versus the British pound.

Gold futures for April delivery rose $10.30, or 0.7%, to $1,426.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.35% from 3.26% late Friday.  

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You never want to kick a nation when it’s down. It’s time, though, to consider the depth of Japan’s coming recession.

A week ago, before radiation fears prompted a mass exodus from Tokyo, a downturn was of the “if” variety. Japan’s prospects then dimmed with each passing day of blackouts and panicked news reports. The questions now are when the recession will officially begin, how bad it will be and when might it end?

There’s this bizarre notion that Japan’s crisis is a non- event for the world economy — that at just 9 percent of global gross domestic product, Japan’s zigs and zags mean little. And besides, it’s thought, the Group of Seven stepped in to cap the yen and all’s well again. Perhaps. Yet Japan’s near-term trajectory may surprise the global bulls out there.

The G-7’s intervention halted the yen’s rally to a postwar high of 76.25. It was a rare success for a grouping so out its depth as America’s economy burned in 2008 and Europe’s debt crisis heated up in recent months. The G-7 showed that multilateralism may be making a comeback.

The international response to Japan’s disaster has been rapid, heartfelt and genuine. China and other regional rivals put aside contentious issues, and Asian relations will be better off for it. There’s also reason to hope this crisis catalyzes a sclerotic leadership class to put Japan on a more dynamic course. Count Sony Corp. Chairman Howard Stringer among those who hope recovery efforts will jump-start the lagging economy as the country uses savings to rebuild.

‘BP Moment’

Yet the fallout from what some pundits call Japan’s “BP moment” is broadening as we speak. In a perfect world, rebuilding efforts would help GDP in the second half of 2011. Lots of infrastructure needs to be restored in Japan’s northeastern Tohoku region, which accounts for roughly 8 percent of the economy.

The trouble is the intangibleness of Japan’s current situation. Many worry that aftershocks and rolling blackouts following the March 11 earthquake are with us indefinitely. That augurs poorly both for business investment and household spending for the remainder of 2011. Household savings may soar as Japanese worry about another huge temblor or tsunami.

Events at two of Japan’s most fabled names — Toyota Motor Corp. and Sony Corp. — tell the story. Both face worst-case scenarios of long-term production shortfalls as scores of plants remain closed and workers are idled. And this will be playing out for weeks, if not months, to come as the nuclear reactors Japan Inc. took for granted stay offline.

Reconstruction Efforts

Myriad other industries will be affected as shipments of chemicals, plastics, steel and other metals, precision ball bearings and electronic components are disrupted indefinitely freecreditscore. It’s certainly possible that reconstruction efforts near Sendai will pick up some of the economic slack, but not all.

Let’s consider, too, the nascent backlash against all things Japanese. It started with sushi. In Hong Kong, the Mandarin Oriental International Ltd.’s flagship and the city’s Four Seasons Hotel stopped buying food from Japan. In Taiwan, a small amount of radiation found in a shipment of peas is the first case of such contamination on imports from Japan, the Associated Press reported yesterday.

A backlash in mainland China would be especially painful. China turned away a Japanese cargo plane operated by All Nippon Airways Co. at Dalian airport. Authorities said the plane’s shipment, which departed from near Tokyo on March 16, had radiation levels that exceeded limits. A sense of wariness about the Japan brand among 1.3 billion can’t be good news for Asia’s second-biggest economy.

Cheap Japan

Of course, all this could be a boon for value investors. In the days before the quake, Goldman Sachs Group Inc. and David Herro of Oakmark International Fund were among those viewing Japanese equities as significantly undervalued. Even Marc Faber, publisher of the Gloom, Boom & Doom report, says it’s time to buy and hold Japanese stocks. Well, now they are cheap for sure.

Yet on top of the uncertainty factor emanating from the Fukushima Dai-Ichi nuclear power plant, Japan is afflicted by political paralysis. Prime Minister Naoto Kan invited the head of the largest opposition party to join his cabinet to build political support for its battle to contain the nation’s deepest postwar crisis. Sadakazu Tanigaki, who leads the Liberal Democratic Party, declined.

Folks, this is no time for partisanship.

Pre-Quake Worries

Japan didn’t enter this crisis in a position of strength. Its economy shrank at an annualized 1.3 percent rate in the three months ended Dec. 31. Even before the quake, Japan had the world’s largest public debt and arguably the lowest interest rates.

And now this. The surge in the yen — as traders front-run a massive repatriation of money to Japan by insurance companies — is a reminder that the quake is the stimulus package that Japan didn’t want.

There’s every reason to think Japan will bounce back in the long run. Unless Japan gets a decisive handle on this uncertainty factor, its prospects will darken in the short run.

Still think that’s not a worry for the global economy?

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

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Asia’s share of the second tranche of European Union bonds sold to help finance aid to Ireland dropped by almost 50 percent, reflecting the securities’ longer maturity and weaker Japanese demand, the EU said.

Asian buyers accounted for 11 percent of the 4.6 billion euros ($6.5 billion) of seven-year securities issued to raise money for Ireland and Romania, the European Commission said. That compares with Asia’s 21.5 percent share of an EU sale of five-year bonds in January. It’s still above Asia’s 4 percent average for EU bond sales between December 2008 and this year.

The decline yesterday resulted from the inability of some Asian central banks to buy bonds with maturities of more than five years and from lower demand in earthquake-stricken Japan, said Gerassimos Thomas, the Luxembourg-based director in charge of the sale at the commission.

“The seven-year maturity is an odd maturity for a benchmark issue and the situation in Japan is obviously difficult,” Thomas said today by telephone. “Despite that, the transaction was an overwhelming success.”

The commission, the 27-nation EU’s executive arm, sold the seven-year bonds at a yield of 8 basis points more than the mid- swap rate. It said the books for the securities paying a coupon of 3.25 percent were oversubscribed more than three times and were closed in less than two hours.

AAA-Rated EFSM

As a result of the issue, the commission will disburse 3.4 billion euros to Ireland through the European Financial Stabilization Mechanism and 1.2 billion euros to Romania under the Balance of Payments facility, which is for EU nations outside the euro area. The AAA-rated EFSM is responsible for providing 22.5 billion euros of the Irish rescue package of 85 billion euros.

The U.K. represented 29 percent of yesterday’s allocation, Germany and Austria a combined 16 percent and France 9 percent, according to the commission quick cash. The Americas accounted for 6 percent and the Middle East and Africa a joint 4 percent, it said.

Asset managers and banks were the “drivers” of the transaction, each accounting for 36 percent, the commission said. Central banks and other “official” institutions represented 18 percent, while insurance and pension companies took 8 percent, according to the commission.

The commission-run EFSM plans to raise as much as 17.6 billion euros this year and 4.9 billion euros in 2012 for Ireland. This year, the EFSM intends to issue four to five benchmark bonds worth 3 billion euros to 5 billion euros each. Three of those sales, including the issues yesterday and in early January, are due in the first half.

Japanese Government

The separate European Financial Stability Facility, which is overseen by euro-area governments, is providing 17.7 billion euros to Ireland. In the EFSF’s inaugural bond sale in late January — 5 billion euros of five-year notes — Asian investors represented 38 percent of the allocation. The Japanese government bought more than a fifth of the issue.

The EFSF plans to raise up to 16.5 billion euros this year and 10 billion euros in 2012 to finance its share of the Irish bailout. Because of buffers meant to ensure its AAA credit rating, the EFSF is raising a total of almost 27 billion euros this year and in 2012 in order to lend 17.7 billion euros to Ireland.

The EFSF intends this year to sell a total of three benchmark bonds worth 3 billion euros to 5 billion euros. The second EFSF sale is due before July.

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The French prime minister says France would support military action against Moammar Gadhafi’s Libya within a matter of hours if the U.N. Security Council approves it.

Francois Fillon says “time is of the essence” and “the threat of Col. Gadhafi shows how urgent it is that the international community mobilizes itself.”

Fillon’s comments on France-2 Television Thursday came just hours before a scheduled Security Council vote on a resolution that would impose a no-fly zone over Libya.

The resolution would also authorize “all necessary measures” to protect civilians from attacks by Gadhafi’s forces.

France and Britain have been among the biggest proponents of a no-fly zone over Libya and French Foreign Minister Alain Juppe was arriving in New York for the debate.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

UNITED NATIONS (AP) _ The U.N. Security Council scheduled a vote Thursday on a resolution that would impose a no-fly zone over Libya and authorize “all necessary measures” to protect civilians from attacks by Moammar Gadhafi’s forces.

France’s U.N. Ambassador Gerard Araud said he expected more than one of the council’s 15 members to abstain when the vote took place at 6 p.m. EDT (2300 GMT), but council diplomats said they did not expect the resolution to be vetoed.

The resolution needs nine “yes” votes and no veto by a permanent member to be adopted.

Russia and China, which have veto power, have expressed doubts about the United Nations and other outside powers using force against Gadhafi, and diplomats said other council nations reacted cautiously, including Germany, India, Brazil and South Africa.

Even if all six countries abstained, the resolution would still have the minimum nine “yes” votes.

The United States joined the resolution’s initial supporters _ Britain, France and Lebanon _ not only in pushing for a speedy vote but in pressing for action beyond setting up a no-fly zone in order to protect civilians from air, land and sea attacks by Gadhafi’s fighters.

The text that will be put to a vote would “establish a ban on all flights in the airspace of the Libyan Arab Jamahiriya in order to help protect civilians,” diplomats said. It also would authorize U.N. member states to take “all necessary measures” to protect civilians under threat of attack, while excluding an occupation force, the diplomats said.

French Foreign Minister Alain Juppe flew to New York Thursday to press the case for speedy Security Council approval.

A French diplomatic official in Paris said military action could follow “in a very short period of time.”

The official, speaking on condition of anonymity because he was not authorized to speak about the issue publicly, said France foresees a “coalition of the willing” that would include support from Arab states but would not involve a ground operation.

French officials have said Arab countries’ support could come, for example, by providing use of their air bases, the official said.

U.S. Secretary of State Hillary Rodham Clinton told reporters in Tunisia on Thursday that a U.N. no-fly zone over Libya would require action to protect the planes and pilots, “including bombing targets like the Libyan defense systems.”

Council members agreed to call a vote after a close-door meeting to discuss reactions to the draft sent to capitals overnight. It was hammered out during more than eight hours of sometimes heated negotiations on Wednesday.

With Gadhafi’s forces intensifying attacks and heading toward opposition-held Benghazi, Libya’s second-largest city, supporters of the resolution have been pressing for speedy council action.

U.S. Ambassador Susan Rice said late Wednesday the Obama administration is “fully focused on the urgency and the gravity” of the situation in Libya.

“We are interested in a broad range of actions that will effectively protect civilians and increase the pressure on the Gadhafi regime to halt the killing and to allow the Libyan people to express themselves in their aspirations for the future freely and peacefully,” Rice told reporters. “Those include discussion of a no-fly zone, but the U.S. view is that … a no-fly zone has inherent limitations in terms of protection of civilians at immediate risk.”

According to a council diplomat who spoke on condition of anonymity because the talks were private, Rice said the U.S. will not act without Security Council authorization, does not want to put U.S. ground troops into Libya, and insists on broad international participation, especially by Arab states.

President Barack Obama and his top national security aides had been cautious with calls for a no-fly zone, which the Pentagon described as a step tantamount to war. The U.S. fears involvement in Libya could further strain its already stretched military and entangle the country in an expensive and messy conflict in another Muslim country.

The council diplomat said Rice told the ambassadors the Obama administration believes there is a significant risk of major atrocities by Gadhafi’s forces in Benghazi and wants the council to do everything possible to prevent that and protect civilians.

Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton, said Thursday that even as Gadhafi’s forces advanced, there would be no talks with his regime. He called the situation on the ground “extremely worrying.”

Asked what the EU would do if Gadhafi’s forces retook Benghazi, Mann said, “We have always said all along that we are planning for all options.”

He also said the EU was looking to the U.N. Security Council before making further decisions.

Russia’s U.N. Ambassador Vitaly Churkin, whose government had expressed misgivings about a no-fly zone, proposed that the council vote first on a resolution calling for a cease-fire in Libya.

Rice told reporters a majority of council members did not support a separate cease-fire resolution but said that a call for a cease-fire could be incorporated in the no-fly resolution.

France and Britain failed to win support for a no-fly zone during a two-day meeting of Group of Eight foreign ministers in Paris earlier Tuesday and the G-8’s final communique did not mention a flight ban, leaving any action to the Security Council.

The Security Council on Feb. 26 imposed an arms embargo on Libya and ordered all countries to freeze assets and ban travel for Gadhafi and some close associates. It also referred the regime’s deadly crackdown on protesters to the International Criminal Court, for an investigation of possible crimes against humanity.

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Japan’s Nikkei stock index nose-dived more than 12 percent Tuesday as the earthquake-shattered country faced an unfolding nuclear crisis after a radiation leak was detected at a crippled power plant. Other Asian markets also tumbled.

The benchmark Nikkei 225 stock average sank a staggering 1,201.2 points, or 12.5 percent, to 8,422.21 in afternoon trading, extending losses of 6 percent Monday _ the first trading day since a devastating earthquake and tsunami struck the northeastern coast, washing away towns and killing more than 10,000 people.

The broader Topix lost 13 percent, while other Asian markets were sharply down, suffering a ripple effect.

The stock sell-off hit nearly every business sector, with electric companies under intense pressure again. The Tokyo Electric Power Co., which operates the crippled nuclear plant, was overwhelmed with sell orders and had yet to trade. Toshiba Corp., a maker of nuclear power plants, was also untraded.

Other companies with nuclear power-related businesses faced a second day of free-falling losses. Mitsubishi Heavy Industries tumbled 19 percent, Kobe Steel Ltd. dived 17 percent, and Hitachi Ltd. shed 8.5 percent. Cosmo Oil, whose refinery caught fire after the quake, slid by 18 percent.

Car makers declined partly because quake-stricken northeastern Japan is a major center for auto production, complete with a myriad of parts suppliers and a network of roads and ports for efficient distribution.

Major vehicle manufactures halted production after the quake, and their shares continued to capsize. Toyota Motor Corp., the world’s largest automaker, fell 11 percent. Honda lost 7.4 percent and Nissan dropped 10.2 percent. Mitsubishi Motors Corp. lost 14.4 percent and truck-maker Isuzu Motors Ltd. plunged 8.6 percent.

Fears about the safety of nuclear power weighed on the shares of companies involved in uranium mining. Energy Resources of Australia Ltd., one of the world’s largest uranium producers, fell 13.2 percent in Sydney.

Even the rare stocks that did well Monday _ industrial and materials companies, which gained due to expectations that they would benefit when Japan rebuilds _ tumbled Tuesday.

Japanese construction company Kajima Corp. dropped 19 percent and Nishimatsu Construction Co. Ltd. skidded 27.2 percent. Analysts said that while the Japanese economy remained virtually shut down, companies in China and elsewhere could fill the void.

Throughout Asia, investors fled stocks as the crisis in the world’s No. 3 economy seemed only to escalate. South Korea’s Kospi was down 3.4 percent to 1,903.21, and Australia’s S&P/ASX 200 fell 2.7 percent to 4,500.20.

Hong Kong’s Hang Seng index slumped 3.8 percent to 22,449.60, and mainland China’s Shanghai Composite Index lost 2.1 percent to 2,874.63.

On Wall Street Monday, concerns over the economic impact of the earthquake and tsunami in Japan led to a broad sell-off. The Dow Jones industrial average lost 51.24, or 0.4 percent, to 11,993.16.

The broader S&P index fell 7.89 points, or 0.6 percent, to 1,296.39. Nine out of the 10 sectors that make up the Standard and Poor’s 500 index lost ground. Utilities companies fell 1.4 percent, the most of any group.

The Nasdaq composite dipped 14.64, or 0.5 percent, to 2,700.97.

Benchmark crude for April delivery dropped $1.90 to $99.29 a barrel on the New York Mercantile exchange. The contract added 3 cents to settle at $101.19 on Monday on the Nymex.

The dollar was worth 81.52 Japanese yen Tuesday, down from 81.88 yen late Friday. Major natural disasters like earthquakes tends to bolster the yen because investors expect the Japanese public and insurance companies to buy back their home currency in order to fund the country’s reconstruction, increasing demand for the yen.

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Congress will probably approve a measure this week to keep the U.S. government in operation through April 8, Senator Dick Durbin of Illinois, the majority whip, said yesterday.

The legislation, proposed by House Republicans March 11, would reduce discretionary spending by about $6 billion and fund the U.S. government for three weeks, replacing a measure that expires March 18. Democrat Durbin, speaking on CNN’s “State of the Union,” said the Senate would take up the measure once it passes the House, where Republicans have majority control.

Enacting the sixth stopgap spending measure of fiscal 2011 is needed to prevent a government shutdown and will provide lawmakers and President Barack Obama with more time to work out a deal to fund U.S. programs through the fiscal year that ends Sept. 30, Durbin said. Congress needs to advance the measure to facilitate an agreement addressing the nation’s long-term fiscal straits, Durbin said.

“We’re not going to balance America’s budget in the next six months,” Durbin said. Republican lawmakers, led by the House, propose cutting $61 billion in government spending this year, which Durbin rejected as part of this year’s budget. “That goes way too far,” he said. The Democratic-controlled Senate rejected that proposal March 9.

Fiscal Issues

Long-term fiscal issues can’t be resolved in stopgap funding bills, Durbin said. “We’re looking at this in honest and hard terms about how we deal with this deficit, not in a matter of six months but over a period of time so that we responsibly cut spending and don’t do it at the expense of America’s economic growth.”

The three-week measure worked out between the White House and lawmakers from both parties would forestall a shutdown of non-essential government services after March 18 business card.

Senator Mitch McConnell, a Kentucky Republican and the minority leader, said on “Fox News Sunday” yesterday that the short-term bill puts the U.S. on a “slow path” toward the $61 billion target.

While Senate Republicans will support the latest spending bill, they will insist on deeper budget cuts as a condition of funding the government through Sept. 30 and of voting to raise the debt ceiling, McConnell said.

“My prediction is not a single one of the 47 Republicans will vote to raise the debt ceiling unless it includes with it some credible effort to do something about our debt,” McConnell said.

Political Bickering

President Barack Obama on March 11 urged lawmakers to work out a deal that keeps the government running through the end of the fiscal year, saying the public expects them to “stop with the political bickering.”

“We can’t keep on running the government on two-week extensions,” Obama said. “That’s irresponsible.”

Representative Kevin McCarthy, a California Republican who is the majority whip, vowed a government shutdown wouldn’t happen and said Obama and Senate Democrats hold the keys to an agreement on financing government operations through the end of the fiscal year.

“We think that Democrats need to step up and actually produce something,” McCarthy said on “State of the Union.”

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The European Union’s foreign policy chief says she will go to Cairo to meet with leaders of the Arab League to discuss the situation in Libya.

Following a meeting of the EU foreign ministers, Catherine Ashton said she would fly to Cairo on Sunday.

Ashton said Saturday she would discuss a “collaborative approach” with Arab League Secretary-General Amr Moussa on Libya and the rest of the region. The Arab League was meeting Saturday in Cairo, with discussions about the possible imposition of a no-fly zone over Libya on the agenda.

Ashton said it was necessary to evaluate how effective sanctions imposed on Moammar Gadhafi’s regime had been so far and that she was “keeping all options moving forward” regarding any additional measures.

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