TOKYO (MNI) - Japanese Finance Minister Yoshihiko Noda on Wednesday said excessive fluctuations in foreign exchange rates would hurt economic growth and financial system stability but also vowed not to guide forex rates in any direction.

Markets misinterpreted comments made last year by then-finance minister Hirohisa Fujii, who sounded as if he would tolerate the appreciation of the yen against major currencies, Noda told reporters in his first interview Wednesday after assuming the post the day before.

"He (Fujii) was referring to an international ca

BERLIN (MNI) - German Chancellor Angel Merkel and French President Nicolas Sarkozy in a joint letter have urged European Commission President Jose Manual Barroso to speed up efforts to introduce stricter controls for CDS markets and uncovered short-selling and to consider an EU-wide ban of these instruments.

"All measures possible in this field should be presented before the July meeting of the Council of [EU] Finance and Economics Ministers," Merkel and Sarkozy wrote in their letter released by the German government on Wednesday.

FRANKFURT (MNI) - The European Central Bank said Wednesday that it will launch a 7-day liquidity providing operation to ease pressures in the short-term U.S. dollar funding markets.

The operation is carried out at a fixed rate of 1.20% with the central bank planing to satisfy all bids received against eligible collateral. The minimum bid is $5 million. The Euro/USD rate is set at 1.1960.

Bids for today's operation are due by 7:45 GMT today. Tender results will be announced at 09:00 GMT.

FRANKFURT (MNI) - The European Central Bank said Wednesday that a total of E56.162 billion Eurosystem covered bond purchases had settled as of June 8.

As of June 7, settled acquisitions had totaled E55.995 billion, the ECB said Tuesday. The ECB plans to buy a total of around E60 billion covered bonds by the end of June 2010 at the latest.

The program is aimed at revitalizing a market segment that has been exceptionally hard hit by the financial turmoil.

By John Shaw

WASHINGTON (MNI) - Senate Majority Leader Harry Reid said Tuesday that the Senate will make "some" adjustments to the $113 billion package of tax cuts and benefit extensions that the House passed several weeks ago.

The Senate is now considering that tax and benefits legislation.

By Alyce Andres-Frantz

CHICAGO, June 8 (MNI) - Charles Evans, President of the Federal Reserve Bank of Chicago Tuesday said the evolving situation in Europe will likely have a limited effect on the U.S. economy.

Evans, who was the keynote speaker at a University Club of Chicago breakfast meeting, said in an audience question and answer session that while risk is higher than before, the net effect of the situation in Europe will have a "limited effect on the U.S."

Admittedly, though, Evans told the audience he gets "nervous when global economies slow."

By John Shaw

WASHINGTON (MNI) - Now that Congress has returned from its Memorial Day recess, the process by which the House and Senate will try to reconcile different versions of financial regulatory reform legislation has come into sharper focus.