Japanese banks to merge
Hokuriku Bank Ltd and Hokkaido Bank Ltd said they may merge to create what would be Japan's second-biggest regional lender with combined assets of Japanese Yen 9.5 trillion (US$80 billion). Hokuriku Bank, which is based in north--western Japan's Toyama prefecture, has a market value more than three times Hokkaido Bank's capital-ization of Japanese Yen 42.7 billion. The banks said in separate statements they are considering a merger. Nikkei English News reported they will merge in the year beginning April of next year. The merger would be the second since the Financial Services Agency this year set aside Japanese Yen 1 trillion (US$8.5 billion) to boost the capital of banks which seek to merge. "Not only major banks, but regional banks also are groping around the way to the revitalization," Minister for Financial Services Heizo Takenaka said.
■ US economy
Association is optimistic
The US economy will expand in the second half of this year and next year at the fastest rate since 2000, leading to more business investment and lower unemployment, a survey by the nation's largest association of business economists found. GDP will increase at a 3.6 percent pace in the second half and for all of next year, according to the National Association for Business Economics, which surveyed 37 fore-casters earlier this month. That would be more than twice the 1.6 percent pace during the first three months this year and the fastest since 3.8 percent in 2000. US unemployment will hold at 6 percent for the rest of this year and fall to 5.7 percent by the end of next year, according to the survey. Business fixed investment will increase 1.4 percent this year before surging 8.1 percent next, the group found, and corporate profits will rise 9.6 percent this year and 15 percent next year.
■ Monetary policy
UK not ready for euro
Britain will not be ready to join the euro until after the country's next general election, due mid-2006 at the latest, Treasury chief Gordon Brown will announce next month, a British newspaper reported yesterday. "He will say the conditions [for joining] are not perfect now, but he expects the economics to be right by early in the next parliament," The Daily Mirror quoted a senior government source as saying. The source said Chancellor of the Exchequer Brown was all for Britain joining but that he believed now was not the right time. "Gordon Brown is preparing to get pro-active and he will make the case for Britain's membership as you've never heard it before. He will basically tell the country that we have to make `one more push,'" the source said.
Oil prices gain slightly
Oil prices were slightly firmer in Asian trading yesterday after dropping overnight following the lifting of UN Security Council sanctions on Iraq, allowing Baghdad's crude oil exports to resume. New York's benchmark light sweet crude contract for July delivery was trading at US$28.89 per barrel at 11:25 am after closing overnight at US$28.85 dollars. "I think oil prices are supported by the low stocks in the US and the strength in the natural gas market. Plus, the driving season in the US has already begun," a local trader said. He said oil prices had stopped reacting to the UN Security Council resolution, which came as no surprise. The Security Council ended 13 years of UN sanctions on Iraq with immediate effect.