Asia Pacific

The Japanese government told the operator of the ravaged Fukushima Daiichi nuclear power plant yesterday to consider accepting temporary state control in return for a much-needed injection of public funds, in effect proposing an interim nationalization of the struggling utility, the New York Times reported yesterday. The order came after Tokyo Electric Power requested ¥689.4 billion ($8.8 billion) in government aid to help pay for its response to the nuclear accident at its Fukushima site.

Japan's Financial Services Agency (FSA) said that it will hire 32 officials to help tighten oversight of illegal trading at securities firms and other regulations as it boosts its headcount and budget for next year, Bloomberg News reported yesterday. The regulator plans to increase its net headcount to 1,548 people in 2012, the most in at least in five years, as its budget grows by 4.1 percent to 23.1 billion yen ($296 million), the agency said. The FSA penalized at least 35 financial institutions this year, including Citigroup Inc. and UBS AG, for breaching Japanese securities rules.

Bharati Shipyard Ltd. said its board has approved restructuring INR28.54 billion ($538.2 million) of its INR32.50 billion debt, a move that will help it cut interest costs, Dow Jones Daily Bankruptcy Review reported today. The company has been struggling with mounting debt on its books after acquiring a majority stake in Great Offshore Ltd. two years ago, as a slowdown in Europe and lower demand in India also impacted its business.

India's lower house of Parliament passed a historic anticorruption bill yesterday, 42 years after one was first demanded, regaining the initiative in a months-long national debate over the pervasiveness of graft, the Wall Street Journal reported today. The bill will have to be passed by the upper house to become law, but it upsets the dynamics of a bitter battle that has played out in the past year between the government and anticorruption activist Anna Hazare.

Turkey's central bank will try to make its actions more predictable next year while sticking to a monetary policy that gives it "wide freedom of action," Governor Erdem Basci said, Bloomberg News reported yesterday. The governor surprised markets this year with a rate cut in August, followed by the introduction of an "interest rate corridor" in October within which policymakers can set interest rates on a daily basis. They immediately used the corridor to tighten policy. Inflation may end this year at more than 10 percent, compared to a target of 5.5 percent, he said.

The Japanese and Indian governments agreed Wednesday to set up a three-year, $15 billion bilateral-currency swap line in an effort to buttress their economies against Europe's sovereign debt crisis, the Wall Street Journal reported Wednesday. The new swap line - five times that of the previous arrangement that expired in early summer - follows a Japan-South Korea deal in October to boost their bilateral swap pact to $70 billion from $13 billion. The moves signal spreading doubts among Asian economic powerhouses about the ability of European leaders to fix their problems anytime soon.

A wide-ranging currency agreement between China and Japan is expected to give the Chinese yuan a more powerful role in international trade, the Wall Street Journal reported today. China, among other nations, has objected to the primacy of the dollar in international trade, and has suggested other ways to run the international monetary system, including giving a bigger role to the International Monetary Fund and a wider role for the yuan.

Turkey's central bank kept its benchmark interest rate unchanged for a fifth month and said it will keep bank borrowing costs high to restrain inflation and slow credit growth, Blomberg News reported today. The central bank held the one-week repo rate at 5.75 percent today, according to a statement on the website of the Ankara-based institution. The lira weakened 0.1 percent against the dollar after the bank sold $50 million for liras, less than the $150 million maximum it had set. Yields on two-year lira bonds rose 4 basis points, or 0.04 percentage point, to 10.43 percent.

International regulators' efforts to strengthen the financial system by tightening bank rules may inadvertently serve to boost opportunities for unregulated or "shadow" financial players, Reuters reported. That is because it is the shadow players, primarily hedge funds and private equity firms, who are expected to buy the billions of euros worth of assets that banks will be selling in the coming months as they slim down their balance sheets to comply with the new rules. "The growth of the shadow banking system is a logical consequence," said Merck Finck analyst Konrad Becker.

China's Pang Da Automobile Trade said on Wednesday it would halt its attempt to acquire Swedish carmaker Saab in light of Saab's bankruptcy, Reuters reported. Saab was declared bankrupt by a court on Monday, ending a nine-month survival battle by its Dutch owner. "In view of Saab being declared bankrupt, Pang Da Automobile Trade has decided to stop the acquisition transaction of Saab," Pang Da said in a statement to the Shanghai stock exchange.