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Wednesday, September 19, 2012

Japan’s Central Bank Launches New Round of Easing on Elusive Growth

The Bank of Japan (BOJ), the country’s central bank, announced today an eighth round of so-called quantitative easing (QE) to fight deflation, which has been a problem for two decades. The BOJ is also attempting to kickstart the nation’s economy as it has contracted after the tsunami last year and stalled in 2012. Japan, the world’s third-largest economy, relies most heavily on exports. The country has suffered from the global slowdown as demand for Japanese exports fell. The strength of the yen, considered by investors as a safe haven, was also a factor. The world financial crisis and low interest rates in Japan have drawn much interest for the currency, making Japanese goods relatively more expensive in other countries. The BOJ will buy another ¥10 trillion ($127 billion) in bonds, bringing its QE total to ¥80 trillion, a fifth of Japan’s gross domestic product. The decision came a week after the U.S. Federal Reserve announced a third round of bond purchases in America, and two weeks after the European Central Bank presented its plan to rescue debt-stricken nations of the euro area. This decision was hailed by Japanese Finance Minister Jun Azumi as “bold,” especially as BOJ Governor Masaaki Shirakawa has a marked preference for monetary orthodoxy. ”Overseas economies are slowing more than we anticipated, which is why we downgraded Japan’s economic view,” Shirakawa said. “Japan’s economic recovery could be delayed by about half a year.”

France Secures Embassies Abroad on Muhammad Caricature

The French government announced today it will close its embassies in 20 countries on Friday as the nation braced for backlash against the publication of a caricature of Prophet Muhammad in weekly satirical magazine Charlie Hebdo. This comes a week after protests swept the Arab world over a U.S.-made anti-Muslim film that ridiculed the prophet. Dozens of people have died in the violence, including U.S. Ambassador to Libya Christopher Stevens and four American staffers in an attack on the U.S. consulate in Benghazi. “In France, there is a principle of freedom of expression, which should not be undermined,” said Foreign Affairs Minister Laurent Fabius in a radio interview. “In the present context, given this absurd video that has been aired, strong emotions have been awakened in many Muslim countries. Is it really sensible or intelligent to pour oil on the fire?” A Pakistani hacker group claims to have attacked Charlie Hebdo’s web site, which wasn’t working today, in retaliation. Agence France Press reported earlier a group called the Syrian Association for Liberty filed a complaint with the French justice against the magazine for “incitation to hatred.” Four people were injured in a package-bomb explosion at a kosher grocery in Sarcelles, a Paris suburb.

Syria’s Assad Planned to Pass Chemical Weapons to Hezbollah

Major-General Adnan Sillu, a defector of the Syrian army, told U.K. Newspaper The Times that Syria President Bashar al-Assad planned to pass chemical weapons to Hezbollah, a Lebanon-based Shi’a militant group considered terrorist by the U.S., the U.K, and Israel, among others. Sillu also told the newspaper Assad has considered using the chemical weapons against the Syrian people “as a last resort.” The news comes after German publication Der Spiegel reported delivery systems for chemical weapons were tested by the embattled regime. Iran Foreign Minister Ali Akbar Salehi met today with Assad, saying the resolution of the 18-month civil war will be found “only in Syria and within the Syrian family.” Assad later said the war was being waged not just against Syria, but against the “axis of resistance” that opposes Israel, as Syria, Iran, and Hezbollah describe themselves. United Nations Peace Envoy Lakhdar Brahimi said today the Syrian conflict is worsening and threatening the region as a whole.

U.S. Says Death of Diplomat in Benghazi Resulted from Terrorist Attack

The death of U.S. Ambassador to Libya Christopher Stevens resulted from an opportunistic terrorist attack on the U.S. consulate in Benghazi, officials said today. National Counterterrorism Center Director Matthew Olsen told U.S. Senators during a hearing that Stevens and three American staffers “were killed in the course of a terrorist attack on our embassy” that may be linked to Al Qaeda. The assailants may have taken advantage of the popular revolt stirred by the anti-Muslim film produced in the U.S. The attack “began and evolved, and escalated over several hours,” Olsen said. It isn’t clear yet whether the assault was planned for the 11th anniversary of September 11.

Defense Secretary Panetta Reassures China about U.S. Focus on Asia

During a visit to China, U.S. Secretary of Defense Leon Panetta told Chinese army officers that a new focus of the U.S. military on Asia and China is not a threat to China’s influence in the region. The U.S. forces have begun to move some of their resources to the area from other places, a step that Panetta assured Chinese officials precedes stronger diplomatic and economic relations. The goal is “to build a sustained and substantive United States-China defense relationship that supports the broader United States-China cooperative partnership,” Panetta said. He extended his visit by one day to meet with China Vice-President Xi Jinping, widely assumed to be President Hu Jintao’s successor. Xi reappeared in the public view after two weeks of absence, quieting speculation that he will not be able to take over the country at the once-in-a-decade power transition that is due to occur at the next Party Congress. Xi and Panetta also discussed the territorial dispute opposing China to Japan over uninhabited islands Japan bought from a private owner last week. “Japan should rein in its behavior and stop any words and acts that undermine China’s sovereignty and territorial integrity,” Xi said. Panetta reiterated the U.S. won’t take sides in any territorial dispute involving China, and urged the parties to find a peaceful settlement.

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