US/Washington/POLITICS $SPY

         Fed's Kohn comments echo tone from recent minutes – eco still weak although slowly recovery; eco operating well below potential; inflation isn't going to be a problem; rates to remain low for extended period.  "I last spoke on the economic outlook in October, and my views since then remain largely unchanged".  Kohn notes that home sales have stalled recently.  Says while signs of recovery are emerging in jobs, "the labor market remains extremely weak".  Says core inflation rates have shown a substantial deceleration.  That said, he isn't calling for deflation – "I anticipate that inflation will remain low for a while, with core PCE inflation not likely to fall much further from the subdued pace I cited a few minutes ago".  Kohn repeats "extended period" - the Federal Open Market Committee has stated that the current exceptionally low level of interest rates is likely to be required for "an extended period" to make progress toward our legislative goals of maximum employment and stable prices.  However, he also says the Fed can't leave policy at current levels forever – "we will also want to be sure that we haven't left highly accommodative policy in place so long that economic and financial conditions become conducive to future inflation. Given the lags in the effects of monetary policy, that means we will not be able to wait until the unemployment rate is down close to its long-term level" link 

(IGM)[JAPAN FIN MIN KAN] is over the wires, saying that the likelihood of Japan escaping a double dip recession has increased,... $EWJ

 

JAPAN FIN MIN KAN] is over the wires, saying that the likelihood of Japan escaping a double dip recession has increased, with economic indicators having improved a lot. That said, he still wants more efforts to end deflation; and confirms earlier press rpts that BOJ Gov Shirakawa is meeting today with Prime Minister Hatoyama for the first of what will be periodic meetings, likely to be every three months between the government and the central bank. Otherwise on the Yen, he notes its recent weakening has been good for Japanese businesses. Even though BOJ sat pat on policy this week; pressure from the Govt on the BOJ to adopt further QE measures looks set to continue, especially heading into the July elections and or if the Yen strengthens