Vietnam Devalues Dong As Inflation Slows Sharply In December

(RTTNews) - Thursday, the State Bank of Vietnam devalued its currency by 3% as the Vietnam's inflation slowed sharply in December. The monetary authority devalued the currency every year since 1995.

The General Statistical Office of Vietnam reported today that the consumer price index or CPI rose at a pace of 19.89% year-on-year in December. Inflation slowed from 24.2% recorded in November. Month-on-month, consumer prices were down 0.68% in December. In November, prices were down 0.76%. The average inflation rate for 2008 was 22.97%, the report showed, surging from 8.3% logged for 2007.

Today, the central bank fixed the rate at 16,989 per dollar, versus 16,494 yesterday. The currency is allowed to trade at 3 percent on either side of the fixed rate. This is the second time the central bank has made a significant increase in the exchange rate, after raising it by 2% in June.

The State Bank of Vietnam has allowed the currency to weaken 5.7 percent against the dollar this year, compared with a 29 percent slide in the Korean won and a 13 percent slump in the Philippine peso.

The Vietnamese dong is facing downward pressure due to the current-account deficit. Vietnam's trade deficit widened 56 percent to $16.9 billion in the first 11 months of the year, according to government data.

China Detains 59 On 'Subversive Rumors' In Tibet -State Media

BEIJING (AFP)--China has detained 59 people accused of fabricating subversive rumors in Tibet, state media said Thursday, blaming forces allied to the Himalayan region's exiled Buddhist leader, the Dalai Lama.

Since unrest broke out in Tibet in March, police have cracked 48 cases of " rumor-mongering" and detained 59 people, the Chinatibetnews.com Web site said, citing Xin Yuanming, deputy chief of police in Tibet's capital Lhasa.

"A number of people with ulterior motives deliberately spread rumors and fanned ethnic sentiment," he was quoted as saying, adding that the alleged rumormongers had been urged on by people close to the Dalai Lama.

The report said the rumors "seriously undermined the image of the party and the government and harmed the public's sense of security." The term "rumors" in China is often used to refer to anti-government views.

In one example mentioned in the report, unidentified people had downloaded " reactionary songs" from the Internet and sold them in compact disc and MP3 format in markets in Lhasa.

The Dalai Lama has lived in exile in India since fleeing his homeland after a failed uprising in 1959 against Chinese rule. China has ruled Tibet since 1951 after sending troops to the Himalayan region the previous year.

Japan Mulls Sending Warship To Tackle Pirates Off Somalia

TOKYO (AFP)--Japan said Thursday it was considering dispatching a destroyer to waters off Somalia to guard against pirates who are inflicting a costly toll on the shipping industry.

A growing number of nations are sending navy ships to fight pirates near the lawless East African country, with Japan's neighbor and sometime rival China set to dispatch three vessels on Friday.

"Japan has to deal quickly with this issue," Chief Cabinet Secretary Takeo Kawamura, the government spokesman, told a news conference.

But Japan has legal problems with sending warships because of its pacifist post-World War II constitution. Under domestic laws, the navy can only protect ships flying the Japanese flag or carrying Japanese nationals.

"Are the current laws appropriate for a mission like this?" Kawamura said.

"The laws stipulate that, as a general rule, Japanese (military) ships can operate within our territorial waters. But is that OK when we are discussing cooperation with the international community?" he said.

Kawamura said ruling bloc lawmakers will study changes in legislation.

The Mainichi Shimbun, quoting unnamed sources, said Prime Minister Taro Aso may announce a decision on an operation by the end of the year.

BOND REPORT: Treasurys Tread Water; Data Underscore Economic Weakness

By Deborah Levine

Treasury prices traded mostly flat ahead of the Christmas holiday Wednesday, after government reports on joblessness and consumer spending pointed to ongoing strains in the U.S. economy.

Two-year note yields (UST2YR) were little changed at 0.90%, recovering from their earlier decline.

Ten-year note yields (UST10Y) were also little changed at 2.19%.

Initial claims for unemployment benefits rose 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, marking the highest level seen for first-time claims since 1982.

A separate report showed a decline of 0.6% in consumer spending during November, though economists surveyed by MarketWatch had been looking for a drop of 0.7%. A measure of consumer inflation excluding energy and food prices was flat in November, as predicted.

Another government report indicated durable-goods orders fell 1% last month, a better performance than the 3% drop that had been forecast.

MARKET SNAPSHOT: U.S. Stocks Make Modest Gains In Light Pre holiday Trading

By Nick Godt

U.S. stocks finished higher after a shortened pre-holiday trading session Wednesday, gaining ground as data on consumer spending and durable goods orders for November came in better than expected.

The New York Stock Exchange closed early at 1 p.m. ET, ahead of the Christmas holiday.

"We're on the plus side, which is sort of a treat, considering that the market has been down for the past five sessions," said Peter Cardillo, chief market economist at Avalon Partners.

The Dow Jones Industrial Average (DJI) gained 49 points, good enough for a 0.6% advance to 8,468, with 22 of its 30 components trading higher.

Shares of General Motors Corp. (GM), hit hard this week, led the blue-chip gains, up 8%.

Automotive rival Toyota Motor Corp. (TM) said that its domestic production dropped 27.2% in November from a year earlier to 288,138 vehicles, the fourth straight monthly decrease.

BOND REPORT: Treasurys Gain As Data Underscore Economic Weakness

By Deborah Levine

Treasury prices rose Wednesday, pushing yields down, after government reports on joblessness and consumer spending pointed to ongoing strains in the U.S. economy.

Two-year note yields (UST2YR) fell 3 basis points, or 0.03%, to 0.88%.

Ten-year note yields (UST10Y) were little changed at 2.18%.

Bond prices move inversely to their yields.

Initial claims for unemployment benefits rose 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, marking the highest level seen for first-time claims since 1982.

A separate report showed a decline of 0.6% in consumer spending during November, though economists surveyed by MarketWatch had been looking for a drop of 0.7%. A measure of consumer inflation excluding energy and food prices was flat in November, as predicted.