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U.S. Treasury Secretary Jack Lew said on Wednesday that moving to a market-determined exchange rate will be a crucial step for China, as the two countries began annual high-level talks. _0"> "We support China's efforts to allow the market to play a more decisive role in the economy and rely more on household consumption to drive China's economic growth. Moving to a market-determined exchange rate will be a crucial step," he said. "We welcome this commitment and China's economic growth. A prosperous China that grows in a way that is consistent with international rules and norms will contribute to the strong, sustainable and balanced growth of the global economy." (Reporting by Lesley Wroughton ; Writing by Ben Blanchard ; Editing by Dean Yates )

China's consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy which could prompt Beijing to launch further stimulus measures to shore up growth. The consumer price index (CPI) rose 2.3 percent in June from a year earlier, missing the market forecast of 2.4 percent in a Reuters poll and down from 2.5 percent in May, the National Bureau of Statistics said on Wednesday. The producer price index (PPI) dropped 1.1 percent in its 28th straight month of decline, versus a market consensus for a fall of 1 percent, signalling that demand in the domestic economy remained lukewarm, despite some recent signs of stabilisation. "The weak inflation data leaves more scope for Beijing to step up use of targeted measures and even opens the opportunity window for blanket easing policy, such as an interest rate cut, to support economic growth," said Wang Jin, an analyst at Guotai Junan Securities in Shanghai. Most economists believe

The Bank of Japan may slightly cut its economic forecast for the current fiscal year at a quarterly review of its estimates next week, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April. _0"> But the central bank will roughly maintain its upbeat price projections and stick to its view that the world's third-largest economy will continue a moderate recovery as the pain from the tax hike heals, the sources said on condition of anonymity. With no major change in the broad economic outlook, the BOJ is set to keep monetary settings unchanged at its two-day rate review ending on Tuesday. In its latest projections made in January, the BOJ expects the economy to expand 1.1 percent in the current business year that began in April, higher than a 0.9 percent rise forecast by analysts in a Reuters poll last month. The central bank may revise down the forecast slightly after data r

Ukraine expects to receive a second tranche of $1.5 billion from an International Monetary Fund's $17 billion aid package, Prime Minister Arseny Yatseniuk said on Wednesday. _0"> Yatseniuk said he was expecting to meet later on Wednesday a visiting IMF mission that has been examining Ukraine's economic performance since June 24. "We believe Ukraine has fulfilled the criteria which are written into our IMF program and we should complete discussions and successfully receive the second tranche," Yatseniuk told a government meeting. The ex-Soviet republic received a first tranche of slightly more than $3 billion in May. (Reporting by Natalia Zinets; Writing By Richard Balmforth ; Editing by Thomas Grove )

The Bank of Japan may trim its economic growth forecast for the current year next week, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April. But the central bank will roughly maintain its upbeat price projections and stick to its view that the world's third-largest economy will continue a moderate recovery as the pain from the tax hike heals, the sources said on condition of anonymity. With no major change in the broad economic outlook, the BOJ is set to maintain its policy framework, under which it has pledged to increase base money by 60-70 trillion yen ($590-$689 billion) per year via aggressive asset purchases. The decision is expected at the end of a two-day meeting on July 15. "The economic contraction in April-June appears to be bigger than expected, so it won't be surprising if the BOJ cuts its growth projection," said Junko Nishioka, chief Japan economist

After weeks of political wrangling, Chile's Finance Minister unveiled changes to a tax reform bill late on Tuesday, including a larger increase in the corporate tax rate in exchange for concessions opposition lawmakers called for. _0"> The reform, a centerpiece of President Michelle Bachelet's administration, maintained an overall goal of increasing tax revenue by $8.2 billion, equivalent to 3 percent of gross domestic product. Corporate taxes will now gradually increase to 27 percent by 2017 from a current 20 percent, according to the agreement between the minister and the Senate's five-member Finance Committee. In the bill as initially presented to Congress, corporate taxes were to increase to 25 percent. "We've reached a historic agreement ... we've managed to move forward on the most complex and profound tax reform in the last 30 years," said Finance Minister Alberto Arenas from Congress in the port city of Valparaiso. With the tax reform

The Federal Reserve has begun detailing how it plans to ease the U.S. economy out of an era of loose monetary policy, indicating it will end its asset purchases in October and appearing near agreement on a plan to manage interest rates in the future, according to minutes of the last Fed policy meeting. The minutes from the June 17-18 meeting indicate the Fed envisions using overnight repurchase agreements in tandem with the interest it pays banks on excess reserves to set a ceiling and floor for its target interest rate. Though no decisions have been announced, the discussion has become detailed enough for Fed officials to contemplate the proper spread between the two - mentioned in the minutes as 20 basis points. The minutes showed the Fed participants also "generally agreed" that monthly bond purchases would end in October, with a final reduction of $15 billion in monthly purchases of U.S. Treasuries and mortgage-backed securities. Fed officials expressed overall c