Malaysia

· Malaysia-Japan Bilateral Trade Stands At RM137.5bil. Total trade between Malaysia and Japan amounted to RM137.45bil (US$42bil) in 2014, an increase of 1.4% compared with the previous year. Out of this, exports totalled RM82.71bil (US$25.6bil), a growth of 4.4% while imports contracted 2.9% to RM54.75bil (US$16.74bil). Malaysian Ambassador to Japan Datuk Ahmad Izlan Idris said the main exports from Malaysia to Japan were liquefied natural gas, electrical and electronics as well as chemical-based products. Ahmad Izlan said in terms of investment, Japan was among the biggest foreign investors in Malaysia whereby up to Dec 31, 2013, some 2,510 investment projects by Japanese companies were implemented with total investments of US$22.7bil. (Bernama)

Asia

· China’s Li Vows to Thread Needle of Reform While Supporting GDP. Premier Li Keqiang promised to intervene if China’s growth lags too much, even as the government pushes forward with what he called painful efforts to shrink its role in the economy. The government will deploy targeted measures if economic growth, targeted at about 7% this year, drifts toward the lower limit of its range and cuts into jobs or income, Li told reporters. Stripping the government of some powers may face resistance from vested interests but is crucial, he said. “This is not nail-clipping, it’s wrist slashing,” Li said at his annual nationally televised briefing, held in Beijing’s Great Hall of the People. “It’s like taking a knife to one’s own flesh.” Li’s remarks highlight the challenges his government faces in achieving its goals as it carries out reforms aimed at cutting waste and weaning the economy off its reliance on exports and investment. He spoke after the end of the national legislature’s 10- day annual session, during which the 7% growth target was introduced along with new measures to fight corruption and polluting industries. (Bloomberg)

· Chinese Central Bank Looking to Deregulate Deposit Rates. China's central bank has signaled it is ready to give up its control over bank deposit rates as early as this year. This will likely go a long way toward helping the country address the unhealthy growth of its shadow banking sector. "There is a very high possibility we will remove (the cap on deposit rates) this year," Zhou Xiaochuan, governor of the People's Bank of China, said Thursday. The move would mark a major milestone. Although it could overburden the banking system, it is expected to dent the dangerously strong growth of highrisk, high-return investment products offered by the shadow banking system. "We will," Zhou said, "take the final step." The announcement came sooner than many financial market players had anticipated. China's financial authorities likely decided to speed up the liberalization process having recognized that the rigid interest rate regime is redirecting the flow of money in the country. (Nikkei)

USA

· Weak Profit Margins Dampen U.S. Producer Inflation. U.S. producer prices fell in February for a fourth straight month, pointing to tame inflation that could argue against an anticipated June interest rate hike from the Federal Reserve. The Labor Department said on Friday its producer price index for final demand declined 0.5% as profit margins in the services sector, especially gasoline stations, were squeezed, and transportation and warehousing costs fell. The PPI had dropped 0.8% in January. In the 12 months through February, producer prices fell 0.6%, the first decline since the series was revamped in 2009. Economists had forecast the PPI rising 0.3% last month and remaining unchanged from a year ago. (Reuters)

· U.S. Consumer Sentiment Wanes in Early March. Consumers in early March scaled back their enthusiasm about the U.S. economy, according to data released Friday. The drop was concentrated in lower-income households facing higher utility bills. The University of Michigan preliminary March sentiment index declined to 91.2 from a final February reading of 95.4, which was below January’s 98.1. January’s reading had been the gauge’s highest reading in 11 years. ”Consumer optimism slipped in early March among lower- and middle-income households,” said Richard Curtin, chief economist at Michigan’s survey of Consumers. “The renewed concerns expressed by lower- and middle-income households mainly involved income declines and higher utility costs—as well as disruptions to shopping and businesses due to the harsh winter.” Economic confidence among higher income households increased this month. Economists earlier expected the early March index to stand at 95.3. Some expect the March drop to be short-lived. (The Wall Street Journal)

Europe

· Russia Cuts Interest Rates as Rouble Crisis Eases. Russia's central bank has cut its key interest rate by one%age point to 14%, as concerns over inflation recede as Russia's economy falters. The move, which was widely expected, comes as the rouble stabilises following its radical 46% decline in 2014. That drop prompted the bank to increase rates up to 17% in an effort to halt the plunge. The rate rise strengthened the rouble against the dollar. In January, Russia's central bank surprisingly cut rates from 17% to 15%. Interest rates were increased last year to encourage saving rather than spending after the currency's plummeting value prompted some Russians to snap up foreign goods in case its value fell still further. (BBC)

Currencies

· Dollar Holds Sway Over Market While Crude Extends Slump. The dollar maintained its rally, trading near a 12-year high versus the euro as investors considered the timeline for higher U.S. interest rates ahead of this week’s Federal Reserve meeting. The greenback was at $1.0501 per euro by 7:32 a.m. in Tokyo on Monday, after reaching its strongest level since January 2003. It held weekly gains of at least 0.4% versus the currencies of Australia and New Zealand. The Bloomberg Dollar Spot Index is at a decade high as the prospect of a U.S. rate rise bolsters the appeal of the greenback relative to its global counterparts. “This has never happened before,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in a client note e-mailed today. “The Fed has never found itself on the other side of global policy and this central bank divergence is making the dollar the most sought-after currency on the planet.” (Bloomberg)

Commodities

· Oil Drops 9% on Week on Stronger Dollar, Glut Warning. Global oil prices tumbled on Friday and fell 9% on the week, hit by a renewed rally in the dollar and a warning by the International Energy Agency (IEA) that the oil glut is growing. Data that showed a sharp drop in the number of U.S. rigs drilling for oil failed to inspire market bulls. Benchmark Brent oil settled near a one-month low below $55 a barrel and U.S. crude settled near a 2-1/2 month low under $45. Brent's premium to U.S. crude, a spread that commands one of the biggest volumes in oil, turned volatile, moving from a 10-day high of $11 a barrel to below Thursday's close of $10. (Reuters) · Gold Pares Gains, Heads to Break 9-Day Streak Lower. Gold pared early gains on Friday, on track to break a nine-day streak lower despite the dollar's extended rally as the precious metal market appeared reluctant to extend losses ahead of the U.S. Federal Reserve meeting next week. Spot gold was up 0.1% at $1,154.35 an ounce at 2:23 p.m. EDT (1823 GMT), in technically oversold territory on the 14-day relative strength index at 25.6. Other precious metals have also taken a hit. Silver, which was on track for a second straight weekly fall, was down 0.3% at $15.52 an ounce, while palladium was heading for its worst week since mid-January. Prices were up 0.1% at $789 an ounce on Friday. Platinum was flat at $1,111 an ounce, having fallen to its lowest since 2009 at $1,108.50 on Thursday. (Reuters)