Asia

· BOJ Says Inflation To Slow Further Due To Oil Slump, Soft Demand. Japanese consumer inflation will slow further dueto slumping oil prices, with the hit on household spending from a sales tax hike last April also acting as a drag, the Bank ofJapan said on Thursday. Needing higher inflation to emerge sustainably from years of deflation and help nurture a recoveryfrom mild recession, the BOJ found some grounds for optimism looking further ahead. The central bank revised up itsassessment on factory output and maintained its optimism that a pick-up in private consumption will keep the economy ontrack for a moderate recovery, to eventually help push up prices. (Reuters)

· Modi Plans $3b Of Share Sales To Meet Budget-Deficit Goal. The Indian government will sell minority stakes in fourstate-run companies to help meet its budget-deficit target for the fiscal year that ends March 31. The government will sell10% holdings in oil refiner Indian Oil Corporation Ltd., National Aluminium Company Ltd. and mineral explorer NMDC Ltd.and pare its stake in power equipment maker Bharat Heavy Electricals Ltd. by 5%, it said today in announcements on itswebsite. It is seeking bankers to handle the divestments on Indian stock exchanges. Prime Minister Narendra Modi andFinance Minister Arun Jaitley have said the government will fulfill its goal of narrowing the deficit to a seven-year low of4.1% of gross domestic product this fiscal year. The gap had reached 99% of the target in the first eight months of the yearthat began in April. (Bloomberg)

USA

· More Americans Than Forecast Filed Jobless Claims Last Week. More Americans than forecast filed applicationsfor unemployment benefits last week, a sign of lingering holiday turnover. Jobless claims decreased by 10,000 to 307,000in the week ended Jan. 17, from a revised 317,000 in the prior period, a Labor Department report showed on Thursdayin Washington. The median forecast of 52 economists surveyed by Bloomberg called for a decline to 300,000. (Bloomberg)· Home Prices Beat Estimates With 0.8% Gain In November. U.S. home prices rose more than economists estimated inNovember, a sign job growth is helping to boost housing demand. Prices climbed 0.8% on a seasonally adjusted basis fromOctober, the Federal Housing Finance Agency said in a report from Washington. The average economist estimate was for a0.3% increase, according to data compiled by Bloomberg. Prices increased 5.3% from November 2013. (Bloomberg)

Europe

· Draghi Commits ECB To Trillion-Euro Asset-Purchase Plan To Fight Deflation. Mario Draghi led the European CentralBank into a new era, committing to a quantitative easing program worth at least 1.1 trillion euros ($1.3 trillion) to counter thethreat of a deflationary spiral. The ECB president shrugged off determined opposition led by German officials with a pledgeto buy 60b euros every month through September next year in a once-and-for-all push to put more cash into circulation andrevive inflation. To assuage critics, the region’s 19 national central banks will make 80% of the purchases and take on anyrisk they carry. (Bloomberg)

· European Borrowing Rates Collapse After ECB Launches QE, Euro Sinks. European government borrowing ratesplummeted to record lows, the euro weakened and stock markets rallied on Thursday after the European Central Banklaunched a landmark bond-buying program. The stubbornly stagnant euro zone economy and falling consumer prices in thecurrency bloc prompted the ECB to unveil a 60b euro a month asset-purchase program to run from March 2015 until theend of September next year. (Reuters)

· IMF Welcomes ECB Bond-Buying, Calls For More Policy Actions. The International Monetary Fund on Thursday said itwelcomed the European Central Bank's decision to buy government bonds, which will pump tens ofbs of euros into asagging euro zone economy. IMF Managing Director Christine Lagarde said the monthly purchases of 60b euros should"strongly reinforce" the ECB's accommodative policies, helping to lower borrowing costs across the euro zone, raiseinflation expectations and support the central bank's mandate for price stability. "It remains essential that theaccommodative monetary stance is supported by comprehensive and timely policy actions in other areas, not leaststructural reforms to boost potential growth and ensure broad political support for demand management policies," Lagardeadded. (Reuters)

· Wary Germans Warn ECB Cash Machine Won't Get Europe On Its Feet. The ECB's plan to pump cash into the eurozone met with dismay in Europe's biggest economy, with many Germans worried they will bankroll measures that removeincentives for struggling member states to carry out the reforms prescribed by Angela Merkel. The chancellor, paying lipservice to the independence of the European Central Bank, reiterated her usual comment that the ECB's bond-buyingprogram "should not obscure" the need for structural reforms driven by member states' politicians. (Reuters)

· ECB's Draghi Says Inflation Could Stay Below Zero In Coming Months. European Central Bank President MarioDraghi said on Thursday euro zone consumer prices could continue to fall over the next couple of months before picking upslowly towards the end of the year. "Annual HICP inflation is expected to remain very low or negative in the months ahead,"Draghi said at a news conference following the ECB's monetary policy meeting. "Such low inflation rates are unavoidable inthe short term given the recent very sharp fall in oil prices and assuming that no significant correction will take place in the next few months." The ECB expects inflation at 0.7% this year and at 1.3% in 2016 -- far below its target of below but closeto 2%. The projections could, however, be revised downwards as they do not yet fully reflect the recent drop in oil prices.(Reuters)

· EU Budget Payment Pushes Up UK Borrowing. UK government borrowing rose to £13.1bn in December, official figuresshow, largely as a result of a £2.9bn payment to the European Commission budget. Figures from the Office for NationalStatistics show public sector net borrowing rose from £10.3bn a year earlier. From April to December borrowing was£86.3bn, down slightly from the £86.4bn borrowed in the same period a year ago. The government's borrowing target forthe year to April 2015 is £91.3bn. (BBC)

Currencies

· Euro Falls To Multiyear Lows Against Dollar, Yen And Pound. European Central Bank President Mario Draghi’sThursday announcement of a €60-billion-a-month government-bond buying program sent the euro tumbling to multiyearlows against its main rivals. The euro was worth $1.1349 in recent trade, its lowest level since September 2003, comparedwith $1.1588 late Wednesday in New York. The shared currency traded at ¥134.54, its lowest level since November 2013,compared with ¥136.50 Wednesday. Meanwhile, the pound traded at £0.7565, compared with £0.7660 Wednesday. TheICE U.S. Dollar Index, a measure of the buck’s strength against a trade-weighted basket of six rival currencies, also roseto its highest level since 2003 as the falling euro pushed it higher. The euro accounts for more than half of the index’s value.It was last up 0.92% to 93.7650. (Marketwatch)

Commodities

· Oil Prices Above $49 Ahead Of ECB Bond Buying Move. Brent crude oil crept above $49 a barrel on Thursday ahead ofan expected decision by the European Central Bank (ECB) to start buying bonds, a move which could push the dollar tonew highs and put downward pressure on commodities. Brent crude futures traded at $49.53 a barrel by 1045 GMT, up 50cents. U.S. crude was up 15 cents at $47.93. (Reuters)

· Gold Rebounds To 5-Month High After ECB Launches QE Program. Gold turned higher and touched a five-month highabove $1,300 per ounce on Thursday, after the European Central Bank (ECB) launched a multi-billion euro bond-buyingprogram aimed at reviving a sagging euro zone economy. President Mario Draghi said the ECB would print money to buyup 60b euros ($69b) worth of sovereign bonds a month in the euro zone, where inflation at minus 0.2% is far below thecentral bank's target of just under 2%. Spot gold, which had fallen as much as 1% to a session low of $1,279.5 in earlytrade, turned positive after Draghi's announcement, to the highest since Aug. 15 at $1,306.20 an ounce. At 2:54 p.m. EST(1954 GMT) it was up 0.8% at $1,303.50. Among other precious metals, spot silver was up 1.6% at $18.40 an ounce.Palladium was up 1.1% at $772 an ounce, while platinum rose 0.9% to $1,279.50 an ounce. (Reuters)