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JAPAN will provide million of dollars (euros) to help fight terrorism in Southeast Asia and aid development under an agreement signed Monday with the Association of Southeast Asian Nations, the foreign ministry said.
The Japan ASEAN Integration Fund was launched after Japanese Prime Minister Junichiro Koizumi pledged to provide 7.5 billion yen (US$64 million; euro53.5 million) in funding during an ASEAN meeting in Kuala Lumpur in December, the ministry said in a statement.
Japanese Foreign Minister Taro Aso and Malaysian Ambassador to Japan Marzuki Mohammad Noor signed the agreement Monday in a ceremony attended by other ASEAN officials, it said.
The fund will use the money to fight terrorism and narrow the economic gap among ASEAN's 10 member countries, the statement said.
It will also be used to help ASEAN stockpile Tamiflu - one of the few drugs believed effective in treating bird flu in humans, the ministry said. Worldwide, the bird flu virus has killed 105 people in eight countries, mostly in Asia, according to the World Health Organization, and has killed or prompted authorities to destroy 200 million birds.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Meanwhile, AFP reports: Major Japanese firms have become less confident for the first time in four quarters due to high oil prices and prospects of rising interest rates, a survey showed today.
The business sentiment index for large companies fell to 6.1 in the three months to March from a record high 10.5 in the previous quarter, according to a joint survey by the finance ministry and the cabinet office.
The index is expected to recover to 8.3 in the June quarter and to 11.3 in the three months to September, according to the survey of 14,301 firms, of which 11,300 replied.
A positive number means upbeat firms outnumber pessimistic ones.
"Companies appeared to be cautious because of the possibility of spikes in crude oil prices which could hit corporate profitability," said Kenji Arata, senior economist at Informa Global Markets (Japan).
Corporate managers were also concerned about the prospect of higher interest rates after the Bank of Japan ended its five-year ultra-loose monetary policy earlier this month, he added.
"The economy is still growing, albeit at a more moderate pace than in the previous quarter," said Arata.
Against that backdrop, he expects the Bank of Japan's Tankan survey of business sentiment survey, due next Monday, to show a rise in the headline index for large manufacturers to 22 from 21 in December.
Monday's survey found that the combined current profit of all Japanese firms is now expected to grow by 3.6 per cent in the year ending March 31, slower than the 6.8 per cent expansion forecast in the pervious survey.
Due to the impact of costlier oil on earnings, Japanese companies have decided to revise down their capital investment plans for the current financial year, according to the poll.
The combined capital investment of all firms is now expected to expand 11.1 per cent, compared with an increase of 11.8 per cent previously forecast.
For the next year to March 2007, their combined capital outlays are predicted to fall by 8.7 per cent.
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