WASHINGTON, Jan. 29--Asian shares have risen strongly on growing expectations that the US Federal Reserve will announce a further cut in interest rates. As the central bank begins a two day meeting ahead of its latest rates vote on Wednesday, Japan’s Nikkei index closed up 3 percent or 391 points at 13,479, BBC reported.
Meanwhile, Hong Kong’s Hang Seng was up 544 points or 2.3 percent in afternoon trade.
The Fed is tipped to cut US rates to 3.25 percent or even 3 percent from the current 3.5 percent as it moves to ease recession fears.
Last week it reduced rates to 3.5 percent from 4.25 percent in an emergency move after global stocks fell heavily.
However, some analysts warned that while global investors were currently being cheered by the expected cut in US interest rates, further weak American economic data could bring shares back down again.
Following record-low US new home sales figures released on Monday, the latest American consumer confidence data was expected to be released later on Tuesday.
“Expectations for further US rate cuts are lifting markets, but whether the market could sustain the gains, it’s up to a series of US economic data due soon,“ said Lee Kyung-soo, an analyst at Daewoo Securities.
“Markets look likely to extend a roller-coaster ride, at least in the first half of 2008 when more dismal news about the US economy is expected to be released.“
Dealers took their cue from Wall Street where the Dow Jones rose 1.45 percent on Monday after the government said that sales of new US homes fell 4.7 percent in December while 2007 new home sales dropped by a record 26.4 percent, AFP wrote.
While the figures raised concerns about the health of the US economy, Wall Street responded positively as the data strengthened market expectations that the Fed will cut rates by up to 50 basis points Wednesday, dealers said.
“The rate cuts will provide a strong psychological support for the stock market,“ said Peter Lai, director at DBS Vickers in Hong Kong. “It will help ease fears that the US economy will be in recession. I don’t think the US economy will be in a recession. Maybe just a slowdown in growth.“

SEOUL, South Korea, Jan. 29--Iraq has stopped crude oil exports to South Korea in protest at an exploration deal involving Korean firms in Iraqi Kurdistan, officials said Tuesday.
Iraq on Jan. 1 suspended an annual contract with South Korea’s top refiner SK Energy to export 90,000 barrels per day, the energy ministry said.
SK Energy said it has been told to back out of the Kurdistan deal if it wants to resume the contract. “We are trying hard to resume the contract through negotiations,“ a spokesman told AFP.
A consortium of South Korean firms including SK Energy signed a deal in November with the Kurdish government to explore the Bazian field, which is estimated to hold 500 million barrels of crude oil.
Iraq has demanded that the consortium led by state-run Korea National Oil Corp cancel the exploration project. The corporation has refused to abandon the deal.
Iraq has been at odds with regional governments over control of new exploration areas.
The dispute has not badly hit supplies because Iraq accounted for less then 3 percent of total crude imports last year, an energy ministry official said. The shortage was covered by purchases on the spot market, he said.
Seoul has about 600 troops stationed in the Kurdish region for reconstruction projects. Parliament voted in late December to keep them there for one more year.
The extension was South Korea’s fourth since 3,000 troops were deployed with a one-year mandate in 2004 at the request of the US government.

Young Japanese search for jobs at an employment agency in Tokyo in this file photo.

TOKYO, Jan. 29--Japan’s jobless rate in 2007 fell to the lowest rate in a decade while household spending jumped unexpectedly in December, the government said Tuesday, easing concerns about an economic slowdown.
The world’s second largest economy is in the midst of a record expansion as it recovers from recession in the 1990s, but concerns had persisted about weak consumer spending and job insecurity, AFP wrote.
Japan’s unemployment rate in 2007 averaged 3.9 percent with 2.57 million without jobs, the internal affairs ministry said. It was down from 4.1 percent or by 180,000 people from a year earlier. It was the first time the jobless rate fell below 4 percent since 1997 when it stood at 3.4 percent, the ministry said.
“The annual figure proved that there is a steady recovery in Japan’s job market,“ said Masahiko Hashimoto, an economist at Daiwa Institute of Research. “Although it appears to be taking a break now, gradual improvement is still expected thanks to growing demand for jobs at manufacturers and other export-oriented sectors,“ Hashimoto said.
In December, the nation’s jobless rate was unchanged at 3.8 percent from the previous month, the 25th consecutive monthly fall.
It was still better than the 3.9 percent economists had expected on average, shored up by growing employment in the retail and transport sectors as well as medical, welfare and farming industries.
But the unemployment rate was above a trough of 3.6 percent in July, which was the lowest since February 1998.
However, a separate report from the labor ministry showed there were more job seekers than job offers for a second straight month in December.
“We can see improvement but our assessment that the situation (in the job market) is at a standstill remained unchanged,“ Hiroko Ota, the minister for economic and fiscal policy, told reporters.
Some economists have warned that Asia’s largest economy may be on course to recession due to a strong yen against the dollar and slowing demand for Japanese products in the United States. But the ministry said spending by Japanese households in December jumped 2.2 percent in real terms from a year earlier to an average 351,667 yen ($3,287), far above market forecasts.

KIEV, Ukraine, Jan. 29--The European Union will begin negotiations for a comprehensive free trade agreement with Ukraine within weeks, EU officials said Monday after meetings with Ukrainian Prime Minister Yulia Tymoshenko dominated by economic and energy issues.
“It’s now just a technical matter. When our experts on both sides are ready, we’ll start ... it’s just a question of weeks“, European Commission President Jose Manuel Barroso said in Brussels, Belgium.
Barroso urged Tymoshenko on Monday to carry out political and economic reforms, saying Ukraine’s political stability was key to its forging better ties with the EU.
The EU is Ukraine’s largest trading partner and its largest market. Ukraine is also an important transit route for western Europe’s oil and gas supplies from Russia and the Caspian Sea region.
Tymoshenko also planned to discuss energy issues with the EU energy commissioner, Andris Piebalgs, and the coordinator for the Nabucco gas pipeline project, Jozias van Aartsen. The Nabucco pipeline, backed by both the EU and the United States, is designed to ease Europe’s reliance on Russia by carrying gas from the Middle East and Caspian countries other than Russia via Turkey.
“There will be more pathways ... for greater diversification of energy supplies and energy security“, Tymoshenko said.
Tymoshenko continued that Ukraine is seeking to buy natural gas supplies directly rather than going through a Russian intermediary company, citing corruption concerns, AP wrote.
She said her government planned to eliminate the middlemen from Ukraine’s energy contracts, saying “the presence of such intermediaries is the first indication of some corrupt actions“. “Ukraine does not need any additional shadowy middlemen for its gas contracts with Uzbekistan, Turkmenistan, Kazakhstan“, she said.
Nearly all of Ukraine’s gas imports come through Russia from the energy-rich central Asian nation of Turkmenistan.
The gas is imported through the Swiss-based trading company RosUkrEnergo, half of which is owned by Gazprom and half by two Ukrainian businessmen. The deal has been in place since 2004.
She denied that her country wished to use its entry into the World Trade Organization (WTO) as a trade lever against non-member Russia, AFP said.
“Joining the WTO is a useful tool for integrating Ukraine,“ in the international community but “not a tool to put pressure on any country,“ she said.

BRUSSELS, Belgium, Jan. 29--Businesses in the 15 nations that use the euro currency should start to see faster and cheaper payments as banks on Monday launched new rules for transferring euros over the next three years, European officials said.
Although euro cash started passing hand to hand in 2002, electronic payments in euro between different countries still costs more than making a bank transfer in the same Country, AP wrote.
That should change with the rollout of new standards over the next three years that will set costs within the euro zone at the same level as national payments and guarantee that the money will pass from one bank account to another within three days.
This will make it easier for companies to do business in another euro nation and encourage more e-payments, the European Commission said, citing a study that promises the fast creation of a more efficient system will generate 123 billion euros ($181.5 billion) in benefits over the next six years.
More electronic invoicing could bring another 238 billion euros ($351 billion), according to the CapGemini study commissioned by the EU executive.
But regulators acknowledged that banks will face heavy upfront costs to replace existing payment systems with one that will see them lose revenue for each transaction. It urged them to push on regardless, saying they would still gain if they grow the market.
“I know that this is a challenge for the banking industry. But I am confident that banks will take up this challenge, improve the efficiency of payments, make use of the scale economies and use the opportunity of a bigger European payments market“, said Charlie McCreevy, the EU’s top financial services official.
Early Monday saw the first credit transfer using the new single euro payments area, or SEPA, rules. bank customers will have to wait until November 2009 before they can set up a euro direct debit with another EU country.
The EU executive has said several times it wants to see more card systems available to customers, breaking away from the Visa and Mastercard duopoly.
The new rules will apply to payments in the euro currency made across the EU’s 27 nations plus Iceland, Liechtenstein, Norway and Switzerland. Some 4,100 banks in those countries have already signed up.

PARIS, Jan. 29--The French government piled pressure on Societe Generale’s chairman Tuesday over multi-billion dollar losses at the bank for which rogue trader Jerome Kerviel was charged.
Kerviel, 31, was freed on bail late Monday as major new questions emerged about Societe Generale’s handling of the 4.9-billion-euro ($7.15 billion) loss that it has blamed on the junior trader, AFP reported.
President Nicolas Sarkozy suggested that chairman Daniel Bouton, whose offer of resignation was rejected last week, should pay for the colossal losses with his job.
“We are in a system where, when you have a big salary, which is without doubt legitimate, and there is a big problem, you cannot escape your responsibilities,“ Sarkozy said late Monday.
Finance Minister Christine Lagarde said the Societe Generale board must decide Bouton’s fate “in the light of two things: the situation today and the future of an institution that is today a great French bank which employs more than 120,000 staff and which has millions of clients.“
Justice Minister Rachida Dati also said Bouton may have to take responsibility for the biggest ever fraud losses in investment banking. The chairman offered his resignation last week but the board rejected it then.
“Light must be cast on all those responsible and they must be able to give an explanation of this huge affair,“ said Dati.
The case has raised concerns about Societe Generale’s oversight of its traders while media reports have said the bank is now almost certain to become a takeover target.
After being questioned in police custody for more than 48 hours, Kerviel was released late Monday but ordered not to leave the country or communicate with Societe Generale employees until the case was resolved.
He was placed under formal investigation for breach of trust, falsifying and using false documents and breaching computer procedures. But investigating judges did not approve the more serious charges of fraud.
If found guilty of breach of trust, Kerviel would face a maximum sentence of three years in prison and a fine of 370,000 euros ($186,500).

The government will increase public sector wages and pensions by 5 percent for three years.

RIYADH,
Saudi Arabia,
Jan. 29--Saudi Arabia will raise wages, welfare payments and subsidies to counter rising disaffection over inflation. The inflation has surged to a 16-year high in the kingdom, Reuters wrote.
Resentment over the cost of the living led the king’s advisers to summon the central bank governor and finance minister next month to discuss the peg, which has forced the central bank to slash rates by 150 basis points since September.
With more US rate cuts looming and Persian Gulf Arab central banks under pressure to follow to avoid currency appreciation, investors are betting the Saudi Arabia and its neighbors will give up on their pegs and focus on fighting inflation.
Inflation, which hit 6.5 percent in Saudi Arabia in December, has “many negative repercussions for the livelihood of citizens,“ the official Saudi Press Agency said on Monday, citing a cabinet statement.
The government of the world’s largest oil exporter will increase public sector wages and pensions by 5 percent for three years, the agency said.
The cabinet also agreed to raise social insurance benefits by 10 percent and subsidize half the cost of shipping and some administrative expenses including those for driving licenses and passports, it said.
Unable to raise interest rates, many of Saudi Arabia’s Persian Gulf Arab neighbors are also resorting to subsidies and price controls to cushion their populations from rising prices.
Qatar, Oman and the United Arab Emirates have imposed ceilings on rent increases. Most Persian Gulf Arab states have either raised public sectors wages or said they are considering similar measures.
After riots in Dubai by migrant workers seeking compensation for savings lost to the tumbling dollar, UAE central bank governor Sultan Nasser Al-Suweidi called in November on Persian Gulf Arab states to sever their pegs and track a currency basket as Kuwait has done.
Although he has since backtracked on those remarks, Persian Gulf Arab policymakers including Qatar’s finance minister have said reform is being discussed and that the neighbors could revalue their currencies together to preserve plans for monetary union.
Forward contracts showed investors expecting a 2.3 percent appreciation in the UAE dirham and a 1.3 percent appreciation in the Saudi riyal in a year.