RPT-POLL-Japan growth likely slowed to 0.6 pct in Jan-March

Reuters: [2008-05-16 00:00:00]

(Repeats May 9 story)

*What: Japan's January-March gross domestic product data

*When: 8:50 a.m., May 16 (2350 GMT, May 15)

*Growth forecast at 0.6 percent Q/Q vs 0.9 percent Q/Q in October-December

TOKYO, May 9 (Reuters) - Japanese economic growth likely slowed to 0.6 percent in the first quarter, a Reuters poll found on Friday, and analysts said the second quarter might bring a further slide in growth as a U.S. slowdown hits exports.

A weaker first-quarter expansion, at an annualised rate of 2.5 percent, would be due to a fall in capital spending, although relatively firm consumption and exports helped to keep the world's second-largest economy running above its potential.

"We will be able to confirm with the January-March data that economic activity remained firm at least until the first quarter, although the downside risk is high for the April-June quarter," said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute.

In January-March, corporate capital spending will likely log its first fall in three quarters, although housing investment is expected to have recovered somewhat from a slump caused by changes in building codes, which led to congestion in construction approvals last year.

"Capital investment in the manufacturing sector is likely to show a large decline in light of growing uncertainty in the outlook for the U.S. and European economies as well as falling profitability due to surging raw material costs," said Hideki Matsumura, senior economist at Japan Research Institute.

The relatively strong growth expected for Japan in the first quarter contrasts with that forecast for the United States, which has been suffering the fallout of the subprime mortgage debacle since last year.

The U.S. economy grew at an annual rate of 0.6 percent in the first quarter. Although that matched the preceding quarter and topped a forecast of 0.2 percent, many analysts say fears of a recession remain.

Shinke said Japan's exports have been stronger than expected as robust shipments of goods to emerging economies made up for lacklustre demand in the United States.

Although Japan's trade surplus in March marked the smallest year-on-year increase in three years partly due to a sharp rise in import bills as oil prices surged, exports in the financial year that ended on March 31 rose 9.9 percent, marking the sixth straight year of growth.

External demand is predicted to have boosted first-quarter growth by 0.5 percentage point, the Reuters poll of 36 analysts found.

The median forecast in the poll for GDP growth was unchanged from a smaller survey of 17 economists conducted last week. [ID:nT26424]

The analysts forecast private consumption, which accounts for more than half of economic activity, grew 0.6 percent in January-March, picking up from 0.2 percent in October-December and matching the biggest growth since the first quarter of 2007.

Many analysts said, however, that private consumption may be inflated as the data is not adjusted to account for the extra day in February in leap years.

Japan's economy grew a robust 0.9 percent, or an annualised 3.5 percent, in the October-December quarter, helped by firm exports and corporate capital investment.

Following are forecasts in percentages for preliminary GDP data for January-March, including the headline growth rate in price-adjusted real terms, private consumption and other components.

JAN-MAR GDP ANNUALISED CONSUMPTION HOUSING ---------------------------------------------------------------- Mitsubishi UFJ Sec 0.2 0.8 0.4 -0.1 UBS 0.4 1.6 0.3 0.0 Norinchukin Research 0.5 1.9 0.3 1.5 Daiwa SMBC 0.5 1.9 0.5 -3.8 Merrill Lynch 0.5 2.0 0.3 5.0 Japan Research 0.5 2.1 0.3 2.2 Mitsui Sumitomo AM 0.5 2.1 0.6 3.0 Deutsche Securities 0.5 2.1 0.5 5.6 Calyon 0.5 2.1 0.3 0.8 Mitsubishi UFJ Bank 0.5 2.1 0.7 2.2 JP Morgan 0.5 2.2 0.5 2.4 Mitsubishi Research 0.6 2.3 0.5 -0.9 Goldman Sachs 0.6 2.3 0.6 4.6 Barclays Capital 0.6 2.4 0.6 5.0 Daiwa SB Investments 0.6 2.5 0.6 -0.8 BNP Paribas 0.6 2.5 0.8 8.4 Mizuho Securities 0.6 2.5 n/a n/a

Lehman Brothers 0.6 2.5 2.4 14.8 BNP Paribas 0.6 2.5 0.8 8.4 Mitsubishi Securities 0.6 2.6 0.6 2.8 HSBC Securities 0.6 2.6 0.5 3.0 RBS 0.7 2.6 0.7 1.8 Daiwa Research 0.7 2.8 0.6 1.7 Credit Suisse 0.7 2.8 0.5 2.0 Nomura Securities 0.7 2.8 0.3 6.0 Nikko Citigroup 0.7 2.8 0.5 4.8 Informa Global Markets 0.7 2.9 0.6 5.0 ABN Amro 0.7 2.9 0.5 0.5 Dai-ichi Life Research 0.8 3.1 0.6 3.4 Shinkin Central Bank 0.8 3.1 0.5 4.6 Meiji-Yasuda 0.8 3.1 0.4 5.8 Morgan Stanley 0.8 3.2 0.6 3.9 Mizuho Research 0.8 3.3 0.7 6.4 Mitsubishi UFJ Research 0.8 3.4 0.6 0.8 NLI Research 0.9 3.8 0.6 4.4 Shinko Research 0.9 3.8 0.6 4.5 ---------------------------------------------------------------- Median 0.6 2.5 0.6 3.0 High 0.9 3.8 2.4 14.8 Low 0.2 0.8 0.3 -3.8

CAPEX EXTERNAL DEMAND* DEFLATOR --------------------------------------------------------------- Mitsubishi UFJ Sec -0.8 0.2 -1.4 UBS -0.9 0.4 -1.5 Norinchukin Research -0.8 0.5 -1.2 Daiwa SMBC -0.5 0.4 -1.5 Merrill Lynch -2.5 0.5 -2.1 Japan Research -2.2 0.7 -2.0 Mitsui Sumitomo AM -1.3 0.3 -1.2 Deutsche Securities 0.2 0.3 -0.7 Calyon 0.1 0.3 -1.2 Mitsubishi UFJ Bank -0.5 0.3 -1.4 JP Morgan -1.8 0.4 -0.5 Mitsubishi Research -1.0 0.4 -1.6 Goldman Sachs -0.8 0.4 -1.2 Barclays Capital -1.6 0.4 -0.5 Daiwa SB Investments -1.4 0.6 -1.7 BNP Paribas -2.1 0.5 -1.4 Mizuho Securities n/a n/a n/a Lehman Brothers -3.9 2.0 -1.6 BNP Paribas -2.1 0.5 -1.4 Mitsubishi UFJ Sec -1.4 0.5 -1.4 HSBC Securities -0.8 0.5 -1.4 RBS -1.5 0.4 -1.4 Daiwa Research -0.2 0.5 -1.5 Credit Suisse 0.0 0.5 -1.4 Nomura Securities -1.4 0.5 -1.2 Nikko Citigroup -1.0 0.4 -1.5 Informa Global Markets -1.1 0.4 -1.5 ABN Amro -1.2 0.5 -1.8 Dai-ichi Life Research -0.7 0.5 -1.5 Shinkin Central Bank -0.2 0.4 -1.4 Meiji-Yasuda -0.7 0.4 -1.6 Morgan Stanley -1.4 0.6 -1.5 Mizuho Research -1.0 0.4 -1.5 UFJ Research -1.5 0.6 -1.7 NLI Research 0.3 0.5 -1.6 Shinko Research -0.6 0.6 -1.5 --------------------------------------------------------------- Median -1.0 0.5 -1.5 High 0.3 2.0 -0.5 Low -3.9 0.2 -2.1

*percentage point of contribution to the overall growth rate. (Reporting by Shigeo Kodama, Akiko Takeda and Yuzo Saeki; Editing by Hugh Lawson) ((yuzo.saeki@thomsonreuters.com; +81 3 6441-1831; Reuters Messaging: yuzo.saeki.reuters.com@reuters.net)) Keywords: JAPAN ECONOMY/GDP POLL

UPDATE 3-Toronto stocks yanked higher by robust resources

Reuters: [2008-05-15 23:35:00]

(Adds details, quotes)

*Index closes at record high

*Resource and financial sectors rally

By Leah Schnurr

TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.

Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.

Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the gold subindex gained 3.6 percent.

The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.

The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.

The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.

Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc., in Vancouver, said that banks were helped by easing trepidation over what problems may be still lurking in the financial sector.

"I think as investors look at more news being disseminated, as some of the financials have reported the potential losses that they're going to take, I guess they feel that we know more of the situation," Mastracci said.

"The more they know, they more they feel better about the prospects going forward, and I think there's some of that in there today."

On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.

The telecoms sector was the only group in negative territory, giving up 0.2 percent.

Shares of Lundin Mining <LUN.TO> added 68 Canadian cents, or 8.8 percent, to C$8.38 after it reported first-quarter profit rose, helped by rising copper and lead prices, as acquisitions increased production.

The Toronto benchmark has climbed more than 20 percent from the lows seen in January, when it dipped below the 12,000 mark amid worries over the health of the U.S. economy and troubles in the financial and credit markets.

Since then it has been spurred higher by red-hot commodities prices, and recent optimism that the worst of the credit problems have been seen. Analysts have also noted that the current round of corporate results generally have been better than had been feared.

"We're getting to the end of earnings season and we got through this without any terribly nasty surprises," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"I think that the mood of investors is probably starting to gain a little traction, and that we're starting to feel a little more optimistic that perhaps the worst of the credit issues are beginning to recede."

Market volume was 441 million shares worth C$8.1 billion. Advancers outpaced decliners 985 to 655. The blue chip S&P/TSX 60 index <.TSE60> closed up 13.14 points, or 1.51 percent, at 884.73.

In New York, stocks were up as a pullback in oil prices calmed worries about inflation. The Dow Jones industrial average <.DJI> closed up 94.28 points, or 0.73 percent, at 12,992.66, and the Nasdaq Composite Index <.IXIC> rose 37.03 points, or 1.48 percent, to 2,533.73. ($1=$1.00 Canadian) (Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

UPDATE 1-Weeping mother urges Taser moratorium in Canada

Reuters: [2008-05-15 23:23:00]

(Adds new studies released)

By Allan Dowd

VANCOUVER, British Columbia, May 15 (Reuters) - A mother whose son's death at a Canadian airport ignited debate over the safety of Taser stun guns wept on Thursday as she called for a moratorium on their use.

"I know my son would not (have) died if he was not Tasered," Zofia Ciscowski told a public inquiry launched into the death of her son, Robert Dziekanski, during a confrontation with police after he arrived at Vancouver's airport as a new immigrant from Poland.

Ciscowski's lawyer said too many questions have been raised about the weapon's safety and the adequacy of police training on using the Taser to allow it to be used until Canada completes an independent safety investigation.

"It's time to put the genie back in the bottle and to start from square one," lawyer Walter Kosteckyj told the public inquiry, which is looking at both the airport incident and the broader issue of the weapon's use.

The stun guns made by TASER International Inc. <TASR.O> have become popular with police internationally as a means of subduing people. They use a 50,000-volt jolt of electricity that causes muscle spasms and incapacitates a person.

The stun gun's supporters say it is much safer for both the person being arrested and police officers than other weapons such as firearms and batons.

Critics have accused Arizona-based Taser of pushing the product into the market without adequate independent testing of health risks such as heart failure.

Taser announced on Thursday the release of three new studies in the United States that it said showed its devices had no effect on human hearts or pacemakers.

Amnesty International says that since 2001 there have been more than 290 deaths in North America in incidents involving the weapon, but Taser says there is no evidence the gun directly caused the fatalities and that factors such as a victim's previous drug use may have been responsible.

Images of Dziekanski writhing on the floor of Vancouver International Airport shortly after he was stunned by police were broadcast around the world, but the cause of his death has not yet been determined.

Kosteckyj said an autopsy found no drugs or alcohol in the 40-year-old man's body.

Ciscowski, 61, who moved to Canada from Poland nine years ago, said she has lost faith in the Royal Canadian Mounted Police over the handling of the incident and the later investigation of her son's death.

"I want justice and accountability," she said, adding that no mother should have to experience what she did.

Police officials who have testified at the inquiry have strongly defended the weapon but acknowledge there are no set standards for using the device.

Kosteckyj, a former police officer, said it is wrong that the company is the primary source of training, and officers are now too quick to stun people instead of waiting to assess if a situation can be diffused through nonviolent means.

Dziekanski, who did not speak English, was described as distraught and confused after waiting alone in the airport for hours for his mother to arrive, but witnesses have questioned police claims that he posed a threat.

Taser Chairman Thomas Smith told the inquiry on Monday the incident was tragic, but declined further comment pending the completion of a medical examiner's report. (Editing by Peter Galloway) ((allan.dowd@thomsonreuters.com; 1+604 664 7314; Messaging: allan.dowd.reuters.com@reuters.com))

Keywords: CANADA TASER/

Mexico bonds gain as price worries ebb; stocks up

Reuters: [2008-05-15 23:21:00]

(Recasts, adds details and closing prices)

* Bond prices gain as inflation fears recede

* Tortilla price hike may be tamer than feared

MEXICO CITY, May 15 (Reuters) - Mexican bond prices rose on Thursday, mostly recovering from recent losses as investors worried less about the impact on inflation from a forecast that corn tortilla prices would rise, while stocks rose.

The government's benchmark 10-year peso bond <MX10YT=RR> rose 0.395 of a point in price to bid 98.058, pushing its yield down 6 basis points to 8.04 percent.

The benchmark IPC stock index <.MXX> gained 0.66 percent to 31,542.97 points, while the peso <MXN=> <MEX01> firmed 0.11 percent at the official central bank close to 10.476 per dollar.

Bond investors fear accelerating inflation could push the central bank to raise interest rates this year.

Worries were further stoked after producers of corn flour tortillas on Wednesday said they will soon raise prices for the Mexican staple.

Some media reports said tortilla prices, eaten for almost every Mexican meal, could rise by as much as 40 percent citing a small tortilla-maker group.

The news spooked bond investors, who dumped long-term bonds on Wednesday, pushing the yield on the 10-year bond up 7 basis points. But yields edged down on Thursday as investors questioned how big the increase could be and when it could hit.

"There has been a knee-jerk reaction to these tortilla prices," said Siobhan Morden a local market strategist at ABN AMRO in New York.

Morden added that it seemed likely that the government would be able to structure a new pact with producers to keep tortilla prices down, as it did in early 2007 and renewed several times in the last year.

But many investors were remaining cautious ahead of the central bank's monthly policy review, set for Friday at 9 a.m. (1400 GMT).

While analysts unanimously ruled out any change on Friday in the bank's overnight rate from levels of 7.50 percent, according to a Reuters poll, many are expecting the bank to introduce a tightening bias in tomorrow's statement.

In currency trading, traders said investors were exercising caution ahead of the central bank's monthly review on Friday. IXE brokerage said in a note that the peso could strengthen to around 10.43 per dollar, should the central bank introduce a more hawkish tone to its statement.

In stock trading, shares of miner Grupo Mexico <GMEXICOB.MX>, one of the world's largest copper producers, gained 3.13 percent to 79.20 pesos as copper prices rose nearly 2 percent in New York.

Shares of Cemex <CMXCPO.MX>, the top supplier of cement in the United States, gained 1.64 percent to 30.96 pesos. Its New York traded shares added 2.32 percent to $29.57.

Among losing stocks, America Movil <AMXL.MX>, Latin America's biggest cell phone operator, shed 1.14 percent to 30.41 pesos while its New York traded shares lost 0.43 percent to $58.25. (Reporting by Michael O'Boyle) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/

*TOP NEWS* Canada

Reuters: [2008-05-15 23:14:00]

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TOP STORIES 
> CAW reaches deals with GM, Chrysler                 [nN15328011] 
> Auto slump hits Canada factory sales in March       [nN15514480] 
> Air Canada cuts back on its fuel surcharges         [nN15304833] 
> Tougher Canada action needed on polar bears-greens  [nN15370262] 
> Lundin Mining profit rises, stock climbs            [nN15276825] 
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