Tuesday, Japanese rate setters expect the worlds' second largest economy to begin to recover from the current recession in the second half of this year, central bank minutes showed.

Minutes from the February 18 and 19 monetary policy meeting revealed that board members of the Bank of Japan suggested that the Japanese economy may begin to recover from the current recession in the second half of this year at the earliest.

Policymakers also said that they may need to cut their view of Japan's long-term growth - especially since there was more demand than expected for BoJ funds. The board also said that an exit strategy was needed for the series of economic stimulus measures.

At the meeting, the board voted unanimously to keep the overnight call rate unchanged at 0.10%. The board also decided to expand special funds-supplying operations in order to facilitate a fall in longer-term interest rates that are actually applicable to fund-raising by firms and relieve them from funding concerns.

The South Korean government said it is submitting an extra budget that contains nearly 18 trillion won or US$13 billion in economic stimulus moves. The finance ministry said the plan is expected to improve economic growth by 1.5% and create more than a half million new jobs. The package is part of a 28.9 trillion won extra budget, which includes 11.2 trillion won in funds for previously announced projects.

The purpose of the supplementary budget is to help ride out the economic crisis by creating and maintaining jobs, the Ministry of Strategy and Finance said in a statement. The amount of this supplementary budget is more than twice that spent during the Asian Financial Crisis, the ministry said.

Elsewhere, South Korea and the European Union reached a tentative trade agreement. Both parties are expected to finalize the deal in a meeting of trade ministers' on April 2. South Korea and the EU started free trade agreement negotiations in May 2007.

In the Philippines, the National Statistics Office said the volume of production in manufacturing declined 19.9% year-on-year in January, at a faster pace compared to a revised 14.2% fall in December.

Macau's Statistics and Census Service said visitor arrivals fell 17.3% annually in February to 1.6 million.

Consumer prices in Vietnam increased 11.25% annually in March, slower than the 14.78% rise in February, a report by the General Statistics Office said.

Taiwan's export orders fell 22.27% annually in February, at a slower pace compared to a 41.67% drop in the previous month, a report by the Department of Statistics, Ministry of Economic Affairs said. Economists expected orders to decline 29.4%. The agency also said industrial production fell 27.14% annually in February, compared to a 43.31% drop in the previous month. Economists were looking for a decline of 29.5%.

In other news, China repeated its call for reform of the global monetary system. In a statement posted on the Chinese central bank website both in English and Chinese, the central bank chief Zhou Xiaochuan said the outbreak of the global financial crisis and its spillover to the entire world reflect the inherent vulnerabilities and systemic risks in the existing international monetary system.

According to Zhou, an international reserve currency is required, which is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies. He called for special attention in giving Special Drawing Rights a greater role, while stating that SDR could act as a super-sovereign currency.

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