Markets continue firm trades; financials gain

However, index heavyweights RIL, HUL, ONGC and L&T remain under pressure in noon deals

Markets continue to edge higher in the noon deals amid volatility on account of short covering in beaten down financial stocks after the rupee strengthened against the US dollar. At 1400 hrs, the Sensex was up 130 points at 18,795 and the Nifty gained 44 points to trade at 5,563.

In broader markets, both the midcap and smallcap indices advanced over 1% each and outperformed the BSE benchmark index which gained 0.7%.

Meanwhile, the Indian rupee firmed against the US dollar. The local currency was up 21 paise at 61.09 against the dollar in noon trade on selling of the US currency by banks and exporters amidst volatile equity market.

In international markets, strong trade data from China eased concerns about the global economic outlook on Thursday, supporting European and Asian shares.

The better tone ended three days of steady falls in MSCI's world equity index caused by expectations the Federal Reserve could soon start to wind down its stimulus program, which has driven this year's rally in stocks.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.8% after the Chinese data, recovering more than half of Wednesday's losses, while Europe's shares edged up about 0.1% in early dealing.

In contrast, Tokyo's Nikkei shed 1.6%, extending Wednesday's 4% drop.

Back home, all the sectoral indices were in the green, except Oil & Gas and Health Care index which shed 0.4% each.

Among the ones leading gains were Realty, Metal,Power, Teck and Auto indices up 1-2.5%. Consumer Durables, Capital Goods, Bankex and FMCG indices too added 0.4-0.7%

The movers among the Sensex-30 were Hindalco which gained 5% followed by Cipla, Maruti Suzuki, Bharti Airtel, Tata Steel, HDFC, Mahindra & Mahindra, Sterlite, HDFC Bank, Coal India and Jindal Steel which added between 2-4%.

The only ones in the red were Wipro, SBI, Dr Reddys Lab, Sun Pharma and Tata Motors which shed 1-2%.

Reliance Industries, HUL, ONGC and L&T were the other notable losers, which slipped 0.1-0.7%.

The market breadth was very positive. 1,238 stocks advanced while 840 stocks declined on the BSE.

ICICI Bank launches 20 Gramin branches across Rajasthan

ICICI Bank, India's largest private sector bank, has launched 20 new Gramin branches across Rajasthan as part of its financial inclusion plan that aims at providing banking services in unbanked villages. All these branches have been opened in small villages, which were so far devoid of any banking facility.

The Thikaria Gramin branch is one of the 20 branches the Bank inaugurated in Rajasthan. The other Gramin branch in the same Dausa district is at Nadari. Other branches opened in the state are at Pritampuri and Basri Khurd villages in Sikar district; at Hudeel and Lalas villages in Nagaur district; at 22ML, 9ML, Ghamurwali and Sanwatsar villages in Ganga Nagar district; at Bhawad, Danwara, Poonasar and Jakhan villages in Jodhpur district; at Otwala and Alasan villages in Jalore district; at Bhinyad and Kanasar villages in Barmer district and at Gudli and Sangwa villages in Udaipur district.

With these launches, ICICI Bank has opened over 140 rural branches in Rajasthan, which is one-fourth of the total number of rural branches across the country. The addition of these new branches has increased the network of ICICI Bank in Rajasthan to more than 400 branches.

ICICI Bank is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of $122 billion at December 31, 2012. The Bank’s presence currently spans 19 countries, including India.

Cadbury to invest over Rs 1,000 crore in Andhra Pradesh plant

Cadbury India will set up its biggest manufacturing facility in the Asia-Pacific region in Andhra Pradesh's Sri City business hub with an initial investment of over Rs 1,000 crore. The announcement by the unit of Nasdaq-listed snacking company Mondelez International is a rare piece of good news in the midst of gloomy economic data and complaints by foreign investors about the business environment in India.

The manufacturer of Cadbury Dairy Milk, Bournvita and Oreo biscuits plans to add three more phases involving a total investment of at least Rs 2,000 core by 2020. The first phase is expected to start by mid-2015. At present, Cadbury India has its manufacturing facilities in Himachal Pradesh, Maharashtra, Karnataka, Madhya Pradesh and Andhra Pradesh.

Cadbury India has signed an agreement with Sri City to take on lease 134 acres for the facility in the business city with special economic zones, domestic tariff zones and free trade and warehousing zones on the AP border, located close to Chennai. The business city now houses over 90 industrial units from 25 countries.

"We are excited over attracting such large investment from Cadbury India at a time when the entire country is suffering from unfavourable economic conditions and Andhra Pradesh is reeling because of a political crisis," Sri City managing director Ravindra Sannareddy.

Cadbury India said that the multi-category food campus it is setting up at Sri City will have the largest chocolate manufacturing plant in the country.The facility is expected to create close to 1,600 direct jobs in total.

"This investment will build on our success in India till date and ensure long-term business sustainability," Mondelez's president for India and South Asia, Anand Kripalu, was quoted as saying. Among the FMCG companies which have their facilities at Sri City are PepsiCo, Kellogg's and Colgate Palmolive.

Lanco Infra Q1 net loss at Rs 578 cr

Lanco Infratech Ltd has posted a huge loss of Rs 578 crore for the first quarter ended June 30, 2013 against a loss of Rs 441 crore in the corresponding period last year.

Gross revenue during the first quarter was down 28 per cent at Rs 2,914 crore against Rs 4,030 crore in the same quarter last year.

The company’s performance was impacted due to lower power generation in its gas-based and coal power plants, hurdles in project execution, higher interest outgo and foreign exchange loss of Rs 220 crore.

The company has gross debt of Rs 35,394 crore. It has also piled up receivables of Rs 3,285 crore from state electricity boards.

Shakti Pumps India gains on bagging contract worth Rs 2.83 crore for solar project

Shakti Pumps India is currently trading at Rs. 40.85, up by 1.30 points or 3.29% from its previous closing of Rs. 39.55 on the BSE.

The scrip opened at Rs. 40.40 and has touched a high and low of Rs. 41.40 and Rs. 40.40 respectively. So far 4,323 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 73.00 on 07-Dec-2012 and a 52 week low of Rs. 37.15 on 17-Aug-2012.

Last one week high and low of the scrip stood at Rs. 43.90 and Rs. 38.70 respectively. The current market cap of the company is Rs. 62.00 crore.

The promoters holding in the company stood at 44.86% while Institutions and Non-Institutions held 10.48% and 44.66% respectively.

Shakti Pumps India has received a rate contract with Rajasthan Electronics & Instruments, a ‘Mini Ratna’ PSU for 900 pumps with order value Rs 2.83 crore for the solar project.

Shakti Pumps was incorporated to manufacture submersible pumps and electric control panels. The company is engaged in the business of manufacturing of submersible pumps along with submersible motors and associated controls panels under the name ‘Shakti’.

LPG distributors want govt to apply brakes on cash transfers

LPG gas distributors want the government to apply brakes on its direct benefit transfer for liquefied petroleum gas (LPG). These distributors have expressed concers that there might be errors and problems in meeting the stiff timelines as center wants to rush with cash transfers before the general elections in 2014.

Limited human resources, said distributors are a major hinderance to meet short notices given by the government.  LPG distributors are struggling to collect documents to link Aadhar card and bank acccount numbers in time.

The scheme is aimed at curbing black-marketeering and leakages in subsidy. The distributors want the government to pay them for guiding customers and updating their data base in short notices. 

Bond markets await RBI dividend payout

Bond markets await the announcement of the RBI's annual dividend payout to the government, which is estimated around 330-350 billion rupees.

Investors had initially worried the dividend payout would have eased liquidity, raising concerns that the central bank would have to resort to new measures to drain cash such as with a sale of government bills.
However, those worries have eased. Instead, traders say liquidity conditions could tighten again despite the dividend payout on speculation that the government has breached its short-term borrowing limit of 300 billion rupees from the RBI.

Should the government have breached the limit, it would constrain its spending, removing a source of liquidity from markets.
The benchmark 10-year bond yield 3 basis points higher at 8.17 pct.

Sensex up 55 points; Metal, realty stocks major gainers

The Sensex and the Nifty were trading up by about 0.3 per cent in the afternoon session on Thursday as marketmen remained cautious despite firm Asian cues.

At 12.15 p.m., the 30-share BSE index Sensex was up 54.61 points (0.29 per cent) at 18,719.53 and the 50-share NSE index Nifty was up 24.55 points (0.44 per cent) at 5,543.65.

Among BSE sectoral indices, metal and realty stocks rallied and were up 2.52 per cent and 2.41 per cent, respectively, followed by atuo 1.21 per cent and capital goods 0.75 per cent.

On the other hand, healthcare index was the worst-hit and was down 1.54 per cent, followed by oil & gas 0.58 per cent and IT 0.09 per cent.

Among 30-share Sensex, Hindalco, Sterlite, Tata Steel, HDFC and Jindal Steel were the top five gainers, while the top five losers were Sun Pharma, Wipro, Cipla, Dr Reddy's and ONGC.

The Nifty opened at 5,510, down nine points while the Sensex opened at 18,687, up 22 points.

The market will remain volatile but the Nifty is unlikely to breach 5,480 on the downside, said technical analyst Gurudatta Dhanokar.

Asian stocks were up, driven by healthcare companies, after the Bank of Japan maintained its stimulus policy and Chinese exports grew more than forecast.

Nikkei shed 232.72 points or 1.68 per cent to 13,592.20, Hang Seng rose 106.18 points or 0.49 per cent to 21,695 and S&P/ASX 200 climbed 46.60 points or 0.93 per cent to 5,057.90.

The Wall Street had ended lower on Wednesday as uncertainty over when the as uncertainty over when the Federal Reserve will begin to wind down its stimulus kept buyers at bay.

If the data show US jobless claims have increased, then it could delay the US’ plans of scaling back its $85-billion-a-month bond-buying programme to prop up the economy.

Ranbaxy trades jubilantly on inking ‘letter of offer’ agreement with KHTP

Ranbaxy Laboratories is currently trading at Rs. 318.00, up by 36.10 points or 12.81% from its previous closing of Rs. 281.90 on the BSE.

The scrip opened at Rs. 280.85 and has touched a high and low of Rs. 320.40 and Rs. 279.00 respectively. So far 849624 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 578.30 on 04-Sep-2012 and a 52 week low of Rs. 253.95 on 02-Aug-2013.

Last one week high and low of the scrip stood at Rs. 320.40 and Rs. 253.95 respectively. The current market cap of the company is Rs. 13451.29 crore.

The promoters holding in the company stood at 63.51% while Institutions and Non-Institutions held 20.74% and 13.69% respectively.

Ranbaxy Malaysia Sdn Bhd (RMSB) is a joint venture company of Ranbaxy Laboratories and has been allocated the site for setting up its Greenfield manufacturing facility in Malaysia. The company signed a 'letter of offer' agreement with Kulim Hi Tech Park (KHTP), a wholly owned state agency and industrial park that houses various other leading industries. KHTP is located at Kulim in the state of Kedah, Malaysia.

The Ranbaxy Greenfield facility will be built on an area of around 15 acres with an investment of around US$ 35 million providing employment to over 200 people. This will be Ranbaxy's second manufacturing plant in Malaysia. Last year in September, the Government of Malaysia gave an approval to RMSB for setting up a Greenfield manufacturing facility in Malaysia as an Entry Point Project (EPP).

The RMSB new facility would manufacture dosage forms including tablets and capsules primarily in the Cardiovascular, Anti Diabetic, Anti-infective and Gastrointestinal segments. Ranbaxy's total output in Malaysia will be increased from 1 Billion doses /annum to 3 Billion doses /annum when the new facility is fully operational. In the 2012 Malaysian budget, the Government of Malaysia liberalized investments into the healthcare sector and encouraged foreign companies.

Fortis Health approves allotment of FCCBs worth USD 30mn

With reference to the earlier announcement dated July 23, 2013 and July 27, 2013, Fortis Healthcare Ltd has now informed BSE that the Issue Committee of the Board of Directors on August 07, 2013 has approved the allotment of the FCCBs amounting up to US$ 30,000,000 to investors in accordance with the terms of the offering of the FCCBs and applicable laws and regulations.

Tata Motors gains on optimism about JLR's sales outlook

Shares in Tata Motors Ltd gained as much as 5.2% on Thursday on hopes that higher sales at its Jaguar Land River unit, especially in China, would help offset declining sales in its home market.

Nomura upgraded the stock to "buy" from "neutral" saying that JLR's China volumes should improve as the company resolves production issues, while an improving US outlook was a positive for the luxury auto market.

On Wednesday the auto maker posted a drop in first-quarter profit, but posted higher margins and China sales for JLR were encouraging for investors.

Tata Motors shares were up 3.5% at 0947 India time (0417 GMT), outperforming a 0.4% gain in the broader NSE index.

Hero MotoCorp to start full-fledged manufacturing abroad

Hero MotoCorp, country's largest two-wheeler maker, is looking at starting full-fledged manufacturing abroad as it plans to set up factories in North and Latin America. While, the company has set up completely-knocked down (CKD) assembly units in some markets, it is now planning to have full-fledged manufacturing operations in atleast three cities, viz Brazil and Colombia in Latin America and Mexico in North America. Further, the unit in Colombia is expected to come up by the middle of 2014, while the other two are expected to be completed a little later.

The company, controlled by the Munjal family, was earlier restricted from making overseas investments as part of the joint venture agreement with erstwhile partner Honda. However, post the separation with Honda in 2011, the company has been taking gradual steps towards generating a substantial portion of revenue from exports, which is now prompting it to look at setting up factories abroad.

Hero MotoCorp is the world's single largest two-wheeler motorcycle company. Honda Motor Company of Japan and the Hero Group entered a joint venture to setup Hero Honda Motors in 1984. Hero Honda Motors changed its name to Hero MotoCorp following the exit of its erstwhile Japanese promoter, Honda, from the company.

ONGC signs crude oil sale agreement with MRPL

ONGC has already signed the COSA with BPCL, HPCL, IOCL and CPCL and this marks the completion of COSAs with the major buyers of ONGC domestic Crude oil.
Forging a powerful bond to succeed, a landmark agreement, the Crude Oil Sale Agreement (COSA), was inked between ONGC and Mangalore Refinery and Petrochemicals Limited (MRPL), a mini ratna Cat 1 and subsidiary of ONGC, on 2nd August for supply of Crude Oil.

This COSA is significant for both ONGC and MRPL as it is a first and also due to the parent- subsidiary relationship. The manner in which COSA was worked out further cements the strict Corporate Governance practiced by ONGC as the agreement was closed at ‘arms length’ and on par with the regulations applicable to OMCs.
This COSA covers supply of MH Crude from JNPT/JD and Offshore Platform. The approximate value of the crude envisaged to be supplied over a five year period is Rs. 38500 Crore. ONGC supplies about 11-12 % of MRPL’s crude requirement.

While acknowledging the contributions of Corporate Marketing Group, ONGC, Commercial Group, ONGC and International Trade Group of MRPL, Chairman and Board of Directors of ONGC and MRPL expressed their compliments on the occasion for a win-win situation.
ONGC has already signed the COSA with BPCL, HPCL, IOCL and CPCL and this marks the completion of COSAs with the major buyers of ONGC domestic Crude oil.

This COSA between ONGC and MRPL has been concluded for the first time. Until now, sales were effected through an MOU signed in March, 2003. However, the MoU expired on March 31, 2004 after which it became important for the two entities to enter into a full-fledged commercial agreement governing sale of crude oil. Corporate Marketing Group, ONGC and Commercial Group, ONGC under the leadership of Mr S. K. Thamilselvan, GM (P) Head, Marketing and Mr V. K. Saxena, GM (F), Chief, Commercial respectively negotiated with the International Trade Group, MRPL headed by Mr Pankaj Agarwal, GM (IT) and finalised the COSA. The COSA was approved by the managements of both the companies during June - July, 2013

Tilaknagar Industries in discussions to sell 15-20% stake

Tilaknagar Industries is reportedly in discussions with global giants such as Suntory Holdings and Pernod Ricard to sell 15-20% stake in the company. The company is expected to fetch Rs 600 crore from the deal which will be utilized for de-leveraging the company’s balance sheet.

Moreover, a clutch of private equity investors and spirits & wine leader Beam Global are also speculated to be in discussions with Tilaknagar Industries to acquire the stake.

Tilaknagar Industries is one of the renowned Indian Made Foreign Liquor players including whisky, brandy, gin, rum and vodka with presence across India. The company manufactures markets and sells more than 40 brands across all price points.

BHEL bags contract worth Rs 265 crore from BPCL for Kochi Refinery project

Bharat Heavy Electricals (BHEL) has won a contract worth Rs 265 crore for supplying the Gas Turbine Generator package for an energy efficient and environment-friendly co-generation captive power plant at Kochi Refinery in Kerala. The company has bagged the award in the face of stiff competition under International Competitive Bidding (ICB).

The order has been placed on BHEL by Bharat Petroleum Corporation (BPCL) for its Integrated Refinery Project (IREP) at Kochi Refinery. The order envisages supply and supervision of 3 numbers of Gas Turbines of 34.5 MW rating each, with associated auxiliaries and control systems.

The gas turbine will be operated in the cogeneration mode for meeting the power and process steam requirement of the upcoming Kochi refinery expansion project. The equipment for the project will be supplied by BHEL’s Hyderabad plant and Electronics Division, Bangalore. Erection and commissioning of the Gas Turbine package will be carried out by the company's Power Sector – Southern Region.

L&T bags contract worth Rs 646.56 crore from Odisha government

Larsen and Turbo (L&T) has bagged contract worth Rs 646.56 crore from the water resources department of Odisha government. The order is for supply of equipment and construction of 28 mega lift irrigation projects in Tel River basin. This will provide irrigation facility in 35,400 ha farm fields of drought prone districts of Kalahandi, Bolangir, Subarnapur and Boudh districts.

Out of five clusters selected for implementation in the first phase, the company has been awarded contract for two clusters. The government has plans to cover 15 clusters with an estimated cost of Rs 3,000 crore for 174 lift irrigation projects.

These projects are expected to be completed within 30 months from the date of signing of agreement.

HDFC Bank raises base rate to 9.8%

Second to hike minimum lending rate after Yes Bank

HDFC BANK,  the second largest private sector bank in the country, has increased its base rate by 20 basis points to 9.8 per cent. The rate hike is effective from August 3.

The private lender became the second bank to hike its minimum lending rate after the Reserve Bank of India’s (RBI) first quarter monetary policy review on July 30.Earlier, YES Bank had increased its base rate by 25 basis points to 10.8 per cent.

Prior to the base rate hike, to the base rate hike, HDFC Bank had raised its deposit rates on maturities ranging from seven days up to six months by 100 basis points.

Rival Axis Bank had also increased short-term deposit rates by 50-225 basis points even though the private lender is yet to revise its lending rate.

While RBI has kept the key policy rate unchanged in its monetary policy review, its liquidity tightening measures in the past few weeks have impacted the short-term rates.

The central bank on July 15 capped bank’s borrowings under liquidity adjustment facility and increased the marginal standing facility rate by 200 basis points to 10.3 per cent. The measures have led to an increase in cost of funds and bankers had said if the steps are not rolled back, soon their margins would get affected. Bankers also indicated that if deposit rates hardened, they would have to increase lending rates to protect their margin.

Markets to get a flat-to-positive start of the day

The Indian markets despite their valiant efforts could not manage a close in green in last session. While there was global concerns weighing on, some weak earnings announcement added fuel to the fire and led the markets lower for the day. Today, the start is likely to be flat-to-positive and some recovery can be expected on the last trading day of the holiday truncated week. Traders are likely to get some support with Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that the economy is likely to grow at 5.5 percent this financial year. Also, net direct tax collections went up by 10.37 per cent to Rs1.17 lakh crore during the April-July period of the current fiscal year as against Rs1.06 lakh crore mopped up during the same four months of 2012-13. Meanwhile, the Cabinet Committee on Economic Affairs is likely to consider the allocation of about Rs 2,900 crore for three schemes that include the setting up of cold chains and mega food parks by 2017. The oil and gas sector will be buzzing, as a Parliamentary panel has recommended review of the Government’s decision to raise gas prices and said that Reliance Industries should deliver its shortfall in production of the fuel at the old rate. There will be some action in textile stocks too, as the government has raised the textiles export target to $43 billion for the current fiscal, from $36 billion set earlier.

There will be some important result announcements too, Adani Enterprises, BEML, Bharat Forge, Deepak Fertilizers, Fortis Healthcare, Fresenius Kabi, IRB Infra, Jai Corp, REC, Shipping Corp and Sobha Developers etc will be announcing their numbers today.

The US markets extended their fall and ended lower, though the major indices managed to come off the days’ low with concern about the outlook for the Fed’s stimulus program still weighing on. Asian markets have made a mixed start, though some of the indices are closed but those which are open today, too are not showing any big move. There is some cautiousness ahead of the conclusion of a Bank of Japan policy meeting and Chinese trade data.

Back home, pressurized by feeble global cues, key domestic benchmarks once again ended the volatile day of trade in the red terrain extending their previous session’s losses. The benchmark got off to a flat but positive opening, shrugging the somber sentiments prevailing in Asian markets. However, the indices slipped and entered into the negative territory, even went on to test important psychological 18,550 (Sensex) and 5,500 (Nifty) levels. The key gauges got solid support around those intraday low levels and they convalesced from thereon. The indices tried hard to move back into the positive territory and even got there but only for a brief period as investors took the opportunity to cash in on the bounce back. The bourses finally extended the declining run for the tenth time in previous eleven sessions but finished way above the session’s lows. The investors mainly resorted to the profit booking due to feeble global cues as sentiment across the globe remained dampened on uncertainty about when the Federal Reserve will start to reduce stimulus. Moreover, weak opening in European counterparts too hurt the sentiments as investors remained on the sidelines ahead of Bank of England’s quarterly inflation report. Back home, some revival was seen in the late hour of trade when the frontline counters paring all their intraday losses turned into the green terrain amid expectations that the government may soon announce measures to curb currency drop. Some respite also came in from report that foreign institutional investors (FII) bought Rs 2.13 billion worth of local shares on August 6, 2013, while domestic institutions were net sellers of Rs 3.24 billion of shares. However, the recovery proved short lived as local bourses once again dipped into the red, sentiments got clobbered out of shape as Indian rupee today depreciated by 27 paise to 61.04 against the US dollar at the time of closing of equity markets due to heavy demand for the US currency from importers. Market mood remained subdued on the back of disappointing Q1 numbers from Tata Motors and NMDC. Tata Motors, on consolidated basis, posted a fall of 23.11% in its net profit at Rs 1,726.07 crore for Q1 FY14 as compared to Rs 2,244.91 crore for the same quarter in the previous year. While, NMDC reported 17.51% decline in its net profit at Rs 1572.19 crore for the quarter. Finally, the BSE Sensex lost 68.16 points or 0.36% to settle at 18,664.88, while the CNX Nifty declined by 23.15 points or 0.42% to end at 5,519.10.

Bank of Japan leaves policy rate unchanged

The Bank of Japan has kept its policy unchanged on Thursday.

The Policy Board of Bank of Japan decided,by a unanimous vote, to set the following guidelines for money market operations for the inter meeting period.
The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen.
With regard to the asset purchases, the Bank will continue with the following guidelines:
The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 50 trillion yen, and the average remaining maturity of the Bank's JGB purchases will be about seven years.
The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual pace of about 1 trillion yen and about 30 billion yen respectively.
 As for CP and corporate bonds, the Bank will continue with those asset purchases until their amounts outstanding reach 2.2 trillion yen and 3.2 trillion yen respectively by end-2013; thereafter, it will maintain those amounts outstanding.
Japan's economy is starting to recover moderately. Overseas economies as a whole are gradually heading toward a pick-up, although a lackluster performance is partly seen. In this situation, exports have been picking up. Business fixed investment has stopped weakening and shown some signs of picking up as corporate profits have improved. Public investment has continued to increase, and the pick-up in housing investment has become evident. Private consumption has remained resilient, assisted by the improvement in consumer sentiment. Reflecting these developments in demand both at home and abroad, industrial production is increasing moderately. Meanwhile, financial conditions are accommodative. On the price front, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) has turned positive. Inflation expectations appear to be rising on the whole.
With regard to the outlook, Japan's economy is expected to recover moderately on the back of the resilience in domestic demand and the pick-up in overseas economies. The year-on-year rate of increase in the CPI is likely to rise gradually.

Regarding risks, there remains a high degree of uncertainty concerning Japan's economy, including the prospects for the European debt problem, developments in the emerging and commodity-exporting economies, and the pace of recovery in the U.S. economy.
The Bank will continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate.^0161
Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome the deflation that has lasted for nearly 15 years.
T. Kiuchi proposed that the Bank will aim to achieve the price stability target of 2 percent in the medium to long term and designate quantitative and qualitative monetary easing as an intensive measure with a time frame of about two years. The proposal was defeated by an 8-1 majority vote. Voting for the proposal: Mr. T. Kiuchi. Voting against the proposal: Mr. H. Kuroda, Mr. K. Iwata, Mr. H. Nakaso, Mr. R. Miyao, Mr. Y. Morimoto,  S. Shirai, Mr. K. Ishida, and Mr. T. Sato.