HONG KONG (Reuters) – The dollar was stuck near an eight-month low on Thursday, ground down by expectations of more Federal Reserve easing, while Asian stocks pulled back slightly from a two-year high as markets took a breather from September's strong rally.
The dollar (.DXY) is down 8.5 percent this quarter against a basket of world currencies, its worst quarter in over eight years, as a sluggish economy and stubbornly high unemployment levels have fueled expectations of another round of asset buying by the Fed.
Asian stocks ex-Japan fell 0.4 percent but were set for their best quarter in a year as investors poured money into regional markets on the back of robust economic growth driven by China.
The MSCI index of Asia Pacfic stocks outside Japan (.MIAPJ0000PUS) has gained over 17 percent this quarter, easily outperforming developed markets with the S&P 500 (.SPX) up 11 percent and European shares (.FTEU3) up 7.2 percent.
For the year to date, the ex-Japan index is up around 7 percent.
Japan's Nikkei (.N225) fell 0.7 percent after U.S. stocks closed lower, but was set for its best monthly performance in six, helped by expectations that further easing would curb the yen's strength.
Mounting speculation that the Bank of Japan was preparing to ease monetary policy again and that it could take action at its meeting next Tuesday was keeping the yen's gains in check.
Traders also remained wary of any further intervention by Tokyo to weaken its currency, as the dollar struggled against the yen.
By late morning it was at 83.80 yen, just above a 15-year low set just before Japan intervened to sell the yen on September 15.
"The big turning point in September was intervention. The move has helped to soothe fears about a further advance in the yen and put the stock market back on a recovery path," said Masayuki Otani, chief market analyst at Securities Japan, Inc.
"Neither the United States nor Japan has changed their stance toward easing policy, and that will likely support the market. The domestic economy is seen slowing from now on, but a sharp slowdown is unlikely and stock prices will likely move to factor that in advance and build on gains."
Japanese government bonds dipped on profit taking after the previous day's rally, although weak industrial output data further clouded Japan's economic outlook and helped to curb losses.
Gold ticked lower but held within sight of a record high hit in the previous session, underpinned by continued U.S. dollar weakness. Spot gold eased $1.80 to $1,307 by 0200 GMT.
(Additional reporting by Charlotte Cooper and Masayuki Kitano in TOKYO)
(Editing by Kim Coghill)
WASHINGTON – Obama consumer finance adviser Elizabeth Warren took a conciliatory tone with bank executives Wednesday, asking them to work with her on new disclosures that will make credit cards fairer and easier to understand.
In her first major speech since being tapped to help set up a new consumer finance regulator, Warren argued that the agency can help banks by clarifying what regulators expect of them. She said better oversight can help consumers make good choices, and push companies to compete on price and quality rather than using hidden fees.
"Good regulations can create an opportunity for good businesses to thrive," Warren told about 400 bankers gathered in Washington for a dinner organized by the Financial Services Roundtable. In prepared remarks, she said the new regulator's purpose is to create "a level playing field where the best products at the best prices win."
Warren also addressed a question on many attendees' minds: How would she work with an industry that fought against the agency's creation, and tried to block her from running it?
"I have not kept my opinions to myself about where I think the financial industry has gone wrong. And I notice some of you have not kept your opinions to yourself about me," she said.
Warren went on to argue that her views are not all that different from those of many bankers. She said banks suffer from competition with less-regulated lenders, and that the agency's rules would apply to every type of company and thus level the playing field.
"We have a remarkable chance to put aside misconceptions and preconceptions — whether they are yours or mine," Warren told the group. Later, she said, "I'm here to ask you to work with me."
She said the alternative to collaboration was a topdown approach in which regulators continue adding new rules without considering how they affect banks.
The consumer agency is a cornerstone of the sweeping financial overhaul signed into law this summer. Warren was seen as a top candidate to be named its first director. Instead, President Barack Obama created a special role for her: advising the White House and Treasury as the agency is being set up.
The agency, which Warren first proposed in a 2007 article, aims to protect consumers from tricky or deceptive loans and other financial products. Its early efforts will involve making mortgage and credit card disclosures easier to understand.
The agency was a major sticking point for lawmakers debating the financial law. Banks said the agency was unnecessary bureaucracy and would create confusion without helping consumers. Democrats said it would address a root cause of the crisis: bad loans to consumers who couldn't pay them back.
WASHINGTON (Reuters) – Elizabeth Warren, the Obama administration's new consumer financial czar, offered an olive branch to the largest U.S. banks on Wednesday, saying she wanted their help in developing a principles-based approach to rulemaking.
Warren told the Financial Services Roundtable that the new Consumer Financial Protection Bureau she is setting up does not intend to layer on complex new rules that add compliance costs and encourage avoidance by banks.
"Instead of creating a regulatory thicket of 'thou shalt nots,' and instead of using ever more complex disclosures that drive up costs for lenders and provide little help for consumers, let's measure our success with simple questions," Warren said in remarks prepared for delivery to the banking trade group.
She said these should include whether customers can understand financial products, figure out their costs and risks and compare products in the marketplace.
Among her first tasks in launching the new agency is to develop a new, simplified disclosure form for credit cards. She said an average consumer should be able to read the form in about four minutes, with 90 percent comprehension and "understand the deal."
Created by landmark financial reform legislation enacted in July, the new agency will take over consumer protection functions from several existing regulatory agencies.
Warren reiterated that she's not interested in dictating costs, terms or product features -- that's up to the marketplace, but for the market to function properly, information needs to be transparent.
"I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike: a level playing field where the best products at the best prices win," she told the group, which represents the 150 largest U.S. integrated financial institutions..
Warren, a Harvard Law School professor and consumer advocate, was named a special adviser to President Barack Obama and Treasury Secretary Timothy Geithner on September 17 to set up the agency, much to the chagrin of Wall Street.
Long a fierce critic of deceptive mortgage and credit card lending practices, she has been criticized by many financial executives for what they see as a lack of practical banking experience and a predisposition that banks are guilty parties.
Since shifting from her previous role as bailout watchdog chairing the Congressional Oversight Panel, Warren has spent time mending fences with the financial industry.
Earlier on Wednesday, she told reporters that the traditional rulemaking approach would put smaller banks at a disadvantage because it would raise compliance costs and "locks in an adversarial relationship" between banks and their customers, letting the rules shape the products.
She said she wants credit cards and mortgages to be more like toasters or cell phones, where customers can easily compare the costs and benefits.
To do this, she said she wants to set goals and work with the industry to meet them through clear, simple rules that do not require much "fine print" or pages of legal disclaimers.
"Layering 10,000 rules is not going to turn this into a working relationship," she told reporters. "Maybe that's the way we have to go. This is the invitation to another approach, and I hope they will work with me."
(Reporting by David Lawder; Editing by Bernard Orr)