SINGAPORE (Reuters) – Plastics entering the world’s oceans have surged by an “unprecedented” amount since 2005 and could nearly triple by 2040 if no further action is taken, according to research published on Wednesday.

An estimated 171 trillion plastic particles were afloat in the oceans by 2019, according to peer-reviewed research led by the 5 Gyres Institute, a U.S. organisation that campaigns to reduce plastic pollution.

Marine plastic pollution could rise 2.6 fold by 2040 if legally binding global policies are not introduced, it predicted.

The study looked at surface-level plastic pollution data from 11,777 ocean stations in six major marine regions covering the period from 1979 to 2019.

“We’ve found an alarming trend of exponential growth in microplastics in the global ocean since the millennium,” Marcus Eriksen, co-founder of the 5 Gyres Group said in a statement.

“We need a strong legally binding U.N. global treaty on plastic pollution that stops the problem at the source,” he added.

Microplastics are particularly hazardous to the oceans, not only contaminating water but also damaging the internal organs of marine animals, which mistake the plastic for food.

Experts said the study showed that the level of marine plastic pollution in the oceans has been underestimated.

“The numbers in this new research are staggeringly phenomenal and almost beyond comprehension,” said Paul Harvey, a scientist and plastics expert with Environmental Science Solutions, an Australian consultancy focused on pollution reduction.

The United Nations kicked off negotiations on an agreement to tackle plastic pollution in Uruguay in November, with the aim of drawing up a legally binding treaty by the end of next year.

Environmental group Greenpeace said that without a strong global treaty, plastic production could double within the next 10 to 15 years, and triple by 2050.

A separate international treaty was agreed on Sunday to help protect biodiversity in the world’s high seas.

(Reporting by David Stanway; Editing by Jamie Freed)

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By Wayne Cole

(Reuters) – A look at the day ahead in European and global markets from Wayne Cole

Hey Jay, why don’t you say what you really think? That’s been Asia’s market reaction to the Fed chief’s warning on faster hikes and higher rates.

Yields on two-year Treasuries have extended their spike to 5.07%, putting them 107 basis points above the 10-year and through the 100bp pain barrier for the first time since 1981.

Going by the textbooks that should be DEFCON 1 for recession, but stock markets aren’t entirely buying it with S&P 500 futures holding steady so far.

Fed fund futures took Powell at his hawkish word and now imply a 70% chance the Fed will hike by 50bp this month, up from just 9% a month ago. The peak has shifted to 5.50-5.75%, with a risk of even more.

Goldman quickly raised its forecast of the peak by 25bp to 5.5-5.75% and assumes the FOMC dot plot will do the same.

JPMorgan noted Powell’s focus on the “totality” of data places a lot of weight on Friday’s payrolls figures and next week’s CPI.

“Now that Powell has opened the door to 50bp, the bar has likely changed such that the February data need to reverse some of the January strength to stay at 25bp,” say JPMorgan’s analysts. And if they go 50bp this month, that might become the new norm for May and June.

Note, the CPI comes during the Fed’s media blackout period, which will complicate the market reaction and maybe lead to a timely Fed whisperer column in one newspaper or another.

All this frenetic speculation has clearly been a boon to the U.S. dollar, which broke above its 200-day moving average on the yen for the first time this year to hit 137.49.

The euro reached $1.0538, having seen its biggest single-session fall in five months overnight.

The poor Aussie dollar suffered an even bigger hit as RBA chief Lowe took this exact moment to mention the possibility of “pausing” its 10-month tightening campaign.

Lowe cited Australia’s relatively restrained wages growth and the fact hikes have more impact on household spending since the majority of mortgages have variable rates rather than fixed.

The Bank of Canada is likely to go all the way and actually pause at its policy meeting later on Wednesday, though it may sound hawkish to try and limit the fallout for the loonie.

The Canadian currency is at four-month lows of 1.3766 per dollar and worse is to come according to Deutsche Bank macro strategist Alan Ruskin.

“If the Fed follows through and hikes by 50bps in March, and even more likely the Bank of Canada strikes the pause button, the rate gap is consistent with USD/CAD heading up to 1.40 or even slightly beyond,” says Ruskin in a note.

Essentially, the cost of not keeping up with the Fed can be a much weaker currency and a greater risk of imported inflation. Thanks again, Jay.

Key developments that could influence markets on Wednesday:

– German industrial output and retail sales data for Jan

– Appearances include ECB President Christine Lagarde and Bank of England Monetary Policy Committee member Swati Dhingra

– Fed Chair Jerome Powell second round testimony to House Financial Services Committee, and Fed’s Barkin speaks

– U.S. JOLTS data, where forecasts are for a sizable fall in job openings, and will also have annual revisions. ADP employment and trade figures

– Bank of Canada announcement at 1500 GMT

(Editing by Sam Holmes)

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By Daniel Becerril

MATAMOROS, Mexico (Reuters) -Two of four Americans kidnapped by gunmen on Friday just after they drove into northeastern Mexico have been found dead, U.S. and Mexican officials said on Tuesday, in a grim reminder of the lawlessness plaguing parts of the border region.

The survivors and the two bodies were discovered by Mexican security forces on Tuesday morning in a wood cabin southeast of the border city of Matamoros, said Americo Villarreal, governor of Tamaulipas, the state the four crossed into from Texas.

Authorities were still investigating how the two Americans died, and one Mexican official said the most likely explanation for the group’s abduction was a case of mistaken identity.

One of the two surviving Americans suffered a gunshot wound to his leg that was not life-threatening, while the other, a woman, was not injured, Villarreal told a news conference.

A Mexican woman, 33, also died during the kidnapping ordeal, apparently from a stray bullet, he said.

A 24-year-old man guarding them at the cabin was arrested at the scene. Before they were found, the four had been moved to a succession of locations in the area, including a local clinic in a bid to throw law enforcement off the trail, Villarreal said.

“We’re very sorry to have this happen in our country and we send our condolences to the families of the victims, their friends, to the people of the United States,” President Andres Manuel Lopez Obrador told an earlier news conference.

Mexican officials on Tuesday morning handed the survivors to U.S. officials at the border, and the two bodies were to follow in the next few hours, Villarreal said. The U.S. State Department confirmed two Americans had returned to the United States.

Mexican officials pledged to work with the U.S. to find the perpetrators, but the incident threw a harsh spotlight on gang violence in Mexico and sparked angry reactions from some U.S. lawmakers critical of Mexican efforts to fight crime.

The four Americans were in a white minivan when they entered Matamoros on Friday. Gunmen fired at them soon afterwards and then forced them into another vehicle, officials said.

A video circulating on social media purportedly of the kidnapping showed a woman being walked towards a white pickup truck by a group of men with body armor and guns. She was forced into the back before the men dragged in two prone figures.

Tamaulipas is one of Mexico’s most gang-ravaged states and has long been plagued by the kidnapping of migrants.

ABC News on Monday named the four Americans as Shaeed Woodard, Zindell Brown, Latavia McGee and Eric James Williams. A Tamaulipas official identified the last two as the survivors.

Williams was receiving treatment in hospital in Brownsville, Texas, across the border from Matamoros, the official said.

MILITARY THREAT

U.S. Republicans, in particular, have been pushing for the U.S. government to take a tougher line on organized crime south of the border amid rising overdose deaths caused by fentanyl, a synthetic opioid trafficked by Mexican cartels.

Republican Senator Lindsey Graham on Monday said it was time to “put Mexico on notice,” advocated introducing legislation to classify some Mexican drug cartels as “foreign terrorist groups”, and set the stage to use military force if necessary.

“I would tell the Mexican government if you don’t clean up your act, we’re going to clean it up for you,” he told Fox News.

White House spokesman John Kirby condemned the incident in Tamaulipas. “Attacks on U.S. citizens are unacceptable, no matter where,” he told a news briefing.

Tamaulipas Attorney General Irving Barrios told the conference with Villarreal that the Gulf Cartel was known to operate in the area but stopped short of explicitly blaming it.

Barrios said the Americans were likely mistaken for somebody else when abducted but noted authorities were still pursuing several lines of investigation.

Tamaulipas officials said McGee was traveling with the group to Mexico to get cosmetic surgery.

Mexican President Lopez Obrador vowed to bring the killers to justice. But he lashed out at what he cast as “tabloid” coverage of the incident and accused the media of not giving the same attention to killings of Mexicans in the United States.

(Reporting by Dave Graham and Brendan O’Boyle; Additional reporting by Lizbeth Diaz and Kylie Madry in Mexico City, and David Shepardson, Steve Holland, Andrea Shalal and Susan Heavey in Washington D.C.;Editing by Stephen Eisenhammer, Susan Fenton, Deepa Babington and Cynthia Osterman)

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By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) – Every March, management of major Japanese firms meet with unions for wage talks across industries that set the tone for employees’ pay in the new fiscal year.

The precedent set at the “shunto” spring wage talks also influences wages at smaller firms that employ seven out of 10 Japanese workers and supply big manufacturers.

The outcome will have a huge influence on how soon the Bank of Japan (BOJ) could end ultra-low interest rates, as steady wage hikes are crucial to kick-starting domestic demand and keeping inflation sustainably around its 2% target.

Here is an overview of the wage negotiations: and why they are important.

HOW IS PAY DECIDED IN JAPAN?

In around March of each year, companies and union negotiate pay for the fiscal year beginning in April of that year.

The practice, known as “shunto,” began in 1956 when Japan’s postwar economy was booming. Unions demanded improvement in wages and job conditions by resorting to strikes in big cities.

The talks peaked in 1974 with a record 33% rise in pay. The increases fell below 3% after Japan slipped into deflation and prolonged economic stagnation in the 1990s.

Unionists have long since turned cooperative, rather than combative, working with management on the shared objective of job security rather than higher pay.

The focus on job security, rather than higher pay, is blamed for keeping Japan’s wage growth stagnant.

WHY ARE COMPANIES UNDER PRESSURE?

Former Prime Minister Shinzo Abe’s “Abenomics” stimulus policies helped boost corporate profits, but failed to prod firms to trickle down the benefits to households via wage hikes.

Incumbent premier Fumio Kishida wants to change this under his flagship “new capitalism” policies that seek to distribute wealth more broadly among the population through higher pay.

He has called on companies to achieve wage hikes that exceed the pace of inflation to help households weather rising living costs brought by a spike in fuel and raw material prices.

Aside from such political pressure, companies also need to offer higher pay to retain talent and hire young workers as Japan’s rapidly aging population intensifies a labour crunch.

WHAT WILL BE THE OUTCOME OF THE WAGE TALKS?

Some of Japan’s biggest firms have already promised large pay hikes including auto giant Toyota and fashion brand Uniqlo parent Fast Retailing.

Analysts expect big firms to offer wage hikes of around 3% in wage talks, which would be the fastest pace of increase since 1997 when Japan was on the cusp of deflation. That would follow a 2.2% increase in 2022, which was the first hike in four years.

Such hikes would meet Kishida’s calls for companies to offer annual wage hikes of 3% but miss an ambitious goal of a 5% pay increase demanded by Japan’s labour umbrella Rengo.

WILL WAGES KEEP RISING?

The key for the economy will be how much companies will raise base pay, which are across-the-board and permanent payments that provide the basis of future allowances like retirement and pensions.

Wary of increasing fixed costs, many Japanese firms long compensated employees with one-off bonus payments in good times rather than raising base pay.

As Japan slid into deflation in the late 1990s, management and unionists agreed to no base-pay hikes for more than a decade through 2013.

Kishida has approached Japan’s union umbrella Rengo in prodding firms to hike base pay. Rengo is demanding a 5% pay hike that includes a base pay rise of 3%, which many analysts see as too ambitious for many firms to swallow.

Of the 2.85% wage hike projected by economists in a January poll, 1.08% is comprised by base pay hikes and another 1.78% increase in additional salary based on seniority.

(Reporting by Tetsushi Kajimoto and Leika Kihara; Editing by Sam Holmes)

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By Nidhi Verma and Noah Browning

NEW DELHI/LONDON (Reuters) – U.S.-led international sanctions on Russia have begun to erode the dollar’s decades-old dominance of international oil trade as most deals with India – Russia’s top outlet for seaborne crude – have been settled in other currencies.

The dollar’s pre-eminence has periodically been called into question and yet it has continued because of the overwhelming advantages of using the most widely-accepted currency for business.

India’s oil trade, in response to the turmoil of sanctions and the Ukraine war, provides the strongest evidence so far of a shift into other currencies that could prove lasting. 

    The country is the world’s number three importer of oil and Russia became its leading supplier after Europe shunned Moscow’s supplies following its invasion of Ukraine begun in February last year.

Top 5 increases of Russian oil cargoes, https://fingfx.thomsonreuters.com/gfx/mkt/movakqoamva/vesselsvalue.JPG

India’s top crude oil suppliers since 2011, https://www.reuters.com/graphics/INDIA-OIL/zgvobrjlwpd/Pasted%20image%201673954639507.png

   After a coalition opposed to the war imposed an oil price cap on Russia on Dec. 5, Indian customers have paid for most Russian oil in non-dollar currencies, including the United Arab Emirates dirham and more recently the Russian rouble, multiple oil trading and banking sources said.

    The transactions in the last three months total the equivalent of several hundred million dollars, the sources added, in a shift that has not previously been reported.

    The Group of Seven economies, the European Union and Australia, agreed the price cap late last year to bar Western services and shipping from trading Russian oil unless sold at an enforced low price to deprive Moscow of funds for its war.

    Some Dubai-based traders, and Russian energy companies Gazprom and Rosneft are seeking non-dollar payments for certain niche grades of Russian oil that have in recent weeks been sold above the $60 a barrel price cap, three sources with direct knowledge said.

The sources asked not to be named because of the sensitivity of the issue.

    Those sales represent a small share of Russia’s total sales to India and do not appear to violate the sanctions, which U.S. officials and analysts predicted could be skirted by non-Western services, such as Russian shipping and insurance.

   Three Indian banks backed some of the transactions, as Moscow seeks to de-dollarise its economy and traders to avoid sanctions, the trade sources, as well as former Russian and U.S. economic officials, told Reuters.

But continued payment in dirhams for Russian oil could become harder after the United States and Britain last month added Moscow and Abu Dhabi-based Russian bank MTS to the Russian financial institutions on the sanctions list.

    MTS had facilitated some Indian oil non-dollar payments, the trade sources said. Neither MTS nor the U.S. Treasury immediately responded to a Reuters request for comment.

An Indian refining source said most Russian banks have faced sanctions since the war but Indian customers and Russian suppliers are determined to keep trading Russian oil.

“Russian suppliers will find some other banks for receiving payments,” the source told Reuters.

“As it is, the government is not asking us to stop buying Russian oil, so we are hopeful that an alternative payment mechanism will be found in case the current system is blocked.”

    FRIENDLY VERSUS UNFRIENDLY

    Paying for oil in dollars has been the nearly universal practice for decades. By comparison, the currency’s share of overall international payments is much smaller at 40%, according to January figures from payment system SWIFT.

Daniel Ahn, a former chief economist at the U.S. State Department and now a global fellow at the Woodrow Wilson International Center for Scholars, says the dollar’s strength is unmatched, but the sanctions could undermine the West’s financial systems while failing to achieve their aim.

“Russia’s short-term efforts to try and sell things in return for currencies other than the dollar is not the real threat to Western sanctions,” he said.

“(The West) is weakening the competitiveness of their own financial services by adding yet another administrative layer.”

The price cap coincided with an EU embargo on imports of Russian seaborne oil, rounding off a year of bans and sanctions, including largely expelling Russia from the SWIFT global payments system.

Around half of its gold and foreign exchange reserves, which stood near $640 billion, were frozen.

    In response, Russia said it would seek payment for its energy in the currency of “friendly” countries and last year ordered “unfriendly” EU states to pay for gas in roubles.

For Russian firms – as payments were blocked or delayed even if they were not violating any sanctions, due to overly zealous compliance – dollars became potentially a “toxic asset”, independent analyst and former adviser at the Bank of Russia Alexandra Prokopenko, said.

    “Russia desperately needs to trade with the rest of the world because it’s still dependent on its oil and gas revenues so they are trying all options they have,” she told Reuters.

    “They’re working on building a direct infrastructure between the Russian and Indian banking systems.”

India’s largest lender State Bank of India has a nostro, or foreign currency, account in Russia. Similarly, many banks from Russia have opened accounts with Indian banks to facilitate trade.

    IMF Deputy Managing Director Gita Gopinath said in the month after Russia’s invasion of Ukraine that sanctions on Russia could erode the dollar’s dominance by encouraging smaller trading blocs using other currencies.

    “The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible,” she told the Financial Times. The IMF did not respond to a Reuters request for comment. 

Beyond Russia, tensions between China and the West are also eroding the long-established norms of dollar-dominated global trade. 

Russia holds a chunk of its currency reserves in renminbi while China has reduced its holdings of dollars, and Russian President Vladimir Putin said in September Moscow had agreed to sell gas supplies to China for yuan and roubles instead of dollars.

    INDIA DISPLACES EUROPE

    India in the last year displaced Europe as Russia’s top customer for seaborne oil, snapping up cheap barrels and increasing imports of Russian crude 16-fold compared to before the war, according to the Paris-based International Energy Agency. Russian crude accounted for about a third of its total imports.

Fossil fuel shipment departures, https://fingfx.thomsonreuters.com/gfx/mkt/zdvxdxgbovx/fueldeparture.JPG

India’s oil imports from various regions, https://www.reuters.com/graphics/INDIA-OIL/gkplwdrmrvb/Pasted%20image%201676636407109.png

   While India does not recognise the sanctions against Moscow, the majority of purchases of Russian oil in any currency have complied with them, trade sources said, and almost all sales have taken place at levels below the price cap.

    Even so, most banks and financial institutions are cautious about clearing any payments to avoid unwittingly breaching any international law.

    For Indian refiners that in recent weeks started settling some Russian oil purchases in roubles, according to the trade sources, payments have been processed in part by the State Bank of India via its nostro roubles account in Russia.

    Those transactions are mostly for oil purchases from Russian state energy giants Gazprom and Rosneft, the sources added. Bank of Baroda and Axis Bank have handled most of the dirham payments, the sources added.

    The banks, Gazprom and Rosneft did not respond to a Reuters request for comment.

India has prepared a framework for settling trade with Russia in Indian rupees should rouble transactions be cut off by further sanctions, the sources said.

    Asked for comment, the U.S. Treasury referred to the assertion by U.S. Treasury Secretary Janet Yellen two weeks into the war: “I don’t think the dollar has any serious competition, and is not likely to for a long time.”

(Reporting By Noah Browning and Nidhi Verma, Additional reporting by Sidhhi Nayak; Editing by Veronica Brown and Barbara Lewis)

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By Mike Collett-White and Stefaniia Bern

KYIV -At a memorial service on Tuesday for four Ukrainians killed last year while carrying out a raid on Russian territory, ordinary soldiers rubbed shoulders with volunteer fighters of the Brotherhood Battalion to which those killed belonged.

The ceremony, at the historic gold-domed St. Michael’s cathedral in central Kyiv, underlined the unclear relationship between irregular groups and Ukraine’s formal armed forces fighting against Russia.

The groups’ role in the war is the focus of increasing scrutiny, after several videos purporting to show cross-border sabotage raids into Russian territory have surfaced and the Kremlin has raised the alarm over the security threat.

Reuters has not independently verified the videos.

Russian President Vladimir Putin has branded the saboteurs as “terrorists” and urged his security services to bolster defences along the frontier.

The four members of the Brotherhood Battalion later buried in Kyiv were Yurii Horovets, 34, Taras Karpiuk, 38, Maksym Mykhailov, 32 and Bohdan Liagov, 19.

They were killed on Dec. 25 last year, according to Russia’s FSB security service, which said at the time that they were armed with foreign-made guns and four improvised explosive devices.

Ukrainian authorities did not comment on the raid then, and have subsequently denied involvement in attacks claimed by Ukrainian-based groups on Russian soil.

Last week, for example, a different group called the Russian Volunteer Corps led by a Russian nationalist in exile who opposes Putin’s rule, said it had briefly taken control of a small border village.

Putin denounced that attack in a televised address, saying: “We will crush them”. Ukraine portrayed it as a false “provocation” by Russia to justify its full-scale invasion.

Later the same day four members of Russia’s National Guard were wounded when their car ran over a mine in the village of Sushany, just across the border from Ukraine, said Alexander Khinstein, a senior federal parliamentarian.

The raids present Kyiv with a dilemma. If regular forces were involved, it would represent a significant escalation in a war that has so far been fought almost exclusively on Ukrainian soil.

But Ukrainian officials have also cast the attacks, which have so far involved small armed groups on limited missions, as a sign Russians may take up arms against their leaders.

“Maybe Russians will begin to wake up,” Ukrainian military intelligence spokesman Andriy Yusov said in response to the operation claimed by the Russian Volunteer Corps.

Ukraine is believed to have struck deep inside Russia on several occasions using drones, though officials decline to confirm them.

‘PAIN AND PRIDE’

At the memorial for the Brotherhood fighters, whose bodies local media said were returned to Ukraine in late February, hundreds of soldiers and civilians crammed into the cathedral’s ornate interior to watch priests bless the coffins.

Mourners lit candles and a man sobbed over one of the caskets.

Outside, as the coffins were being carried into the cathedral, the leader of the nationalist Brotherhood movement which is associated with the Battalion said he felt both “pain and pride”.

“They were one of the most courageous ones to die in battle,” Dmytro Korchynsky, a controversial figure in Ukraine for his ultra-nationalist and devout Orthodox Christian views, told Reuters.

“Our aim is to bring the war over to Russian territory. It’s bad that the war is currently only on our territory, it has to expand to the enemy’s territory as well.”

Korchynsky was careful to distinguish between the battalion’s activities in Ukraine, including areas occupied by Russians – where he said its members coordinate with Ukraine’s armed forces – and those on Russian soil.

“When we are on Russian territory, we act autonomously,” he added.

Ukraine’s defence ministry did not immediately respond to a request for comment on its relationship with the Brotherhood Battalion, called “Bratstvo” in Ukrainian, and the armed forces.

The conservative nationalist Brotherhood movement began around 20 years ago to promote Christian values. Western media reports say it has been active in sometimes dangerous combat missions since Russia launched its full-scale invasion of Ukraine in February 2022.

Korchynsky said most of the Brotherhood volunteers were Christians, and that the numbers were “constantly growing.

“The battalion has several hundred fighters,” he said. “We can’t disclose precise numbers, as the battalion takes part in investigative and reconnaissance activity.”

(Reporting by Mike Collett-White and Stefaniia Bern; Editing by Alex Richardson)

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By Clotaire Achi and Stephane Mahe

PARIS (Reuters) -France’s nationwide strike against a planned pension reform, which disrupted train services, shut schools and halted fuel deliveries, will spill into Wednesday as unions seek to force a government retreat on the deeply unpopular policy.

Around 1.28 million people took to the streets on Tuesday in demonstrations across the country, the interior ministry said, making turnout for the protest day – the sixth against the reform this year – the highest so far.

This is a critical time for labour and the government since French President Emmanuel Macron hopes parliament will adopt his plan to raise the pension age by two years to 64 before April.

Looking to pile pressure on lawmakers, France’s hardline unions said there would be rolling strikes going forward that could go on for days, at least in some sectors including at TotalEnergies’ oil refineries.

“The real fight starts now,” said Marin Guillotin, FO union representative at the Donges refinery in western France.

“We haven’t been heard or listened to. We are using the only means we have left: It’s the hard strike … we are not going to give up.”

Trains will experience disruptions again on Wednesday, as will the Paris metro system, though slightly less than on Tuesday, the SNCF and RATP transportation companies said.

The government said 10,000 more protesters turned out nationwide on Tuesday than the previous peak of 1.27 million on Jan. 31, and bigger crowds were reported by media and local officials at rallies in some cities, including Marseille.

The strike also drew in more industrial sectors, extending to truck drivers and garbage collectors. Local media quoted the CGT union as saying 700,000 marched in Paris. Police put the number at 81,000.

Another round of protests will take place on Saturday, France’s union leaders announced on Tuesday evening as they again urged Macron to drop the reform, saying the president’s rigid stance could lead to an “explosive” situation.

‘UNFAIR’

Macron’s proposal to make people work longer before they are eligible for pensions is deeply unpopular, opinion polls show.

“This reform is unfair,” said Aurelie Herkous, who works in public finance in the Normandy town of Pont Audemer. “Macron offers tax gifts to companies … he’s got to stop coming down on the same people time after time.”

France’s leading trade unions have so far acted with rare unity, but the coming weeks will test that.

The CFDT, France’s biggest trade union and generally reform-minded, has not committed to the rolling strikes and has said there could be other forms of protest.

While the government will be looking for divisions among the unions, the CGT and FO, which are powerful within the transport and energy sectors, would still be able to bring significant disruption even without CFDT participation. 

The government insists its reform plan is essential to ensure the pension system does not run out of money.

“I can understand that not many people want to work two more years, but it’s necessary to ensure the viability of the system,” Prime Minister Elisabeth Borne told France 5 TV.

Macron’s centrist alliance does not have an absolute majority in parliament, and his government may use special constitutional powers to enact the legislation by bypassing the lower house – something union leaders have warned him not to do.

“Forcing (the bill) through would spark a crisis,” CGT leader Philippe Martinez said.

The Senate was likely to adopt overnight the bill’s Article 7, that pushes retirement age to 64.

(Reporting by Dominique Vidalon, Forrest Crellin, Benjamin Mallet, Ingrid Melander, Elizabeth Pineau, Alain Acco, Blandine Henault, Marc Leras, Yonathan Van der Voort, Layli Foroudi, Tassilo Hummel, Geert de Clercq, Richard Lough; Writing by Ingrid Melander; Editing by Christina Fincher, Aurora Ellis and Cynthia Osterman)

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By Kantaro Komiya and Eimi Yamamitsu

(Reuters) – The Bank of Japan will end its long-term yield control policy this year, the majority of economists said in a Reuters poll, anticipating academic Kazuo Ueda’s new leadership to dismantle the complex easing scheme and restore bond market functionality.

The demise of yield curve control (YCC) has been the market’s focus for the Japanese central bank after its originator, the incumbent governor Haruhiko Kuroda, ends his second five-year term on April 8.

Although all but one forecast no surprise at Kuroda’s last rate-review this week, half of economists in the survey said Ueda will carry out additional tweaks within three months, if not a total abandonment, to the YCC such as widening a 10-year yield cap range from 0.5%.

Fourteen of 26 respondents to a question about the YCC expected the BOJ to terminate it this year, the Feb. 28-March 6 poll showed. Eight of them voted for April-June, four for July-September and two for October-December.

“Ueda has argued long-term yield control is a scheme that does not support fine-tuning,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management, who expects Ueda to scrap YCC at his first policy meeting in late April. “A drastic change is plausible.”

Four respondents said the end of the YCC will happen next year and another eight projected it in 2025 or later. None selected the option “BOJ will not end YCC”.

In a separate question asking about what the BOJ would do if it were to tweak the YCC before ending it, 14 of 23 analysts chose widening of its yield fluctuation range again after doubling it to 0.5% in December. The remaining nine economists expected targeting a shorter-term yield.

Japan’s 10-year government bond yield has breached BOJ’s 0.5% ceiling a number of times even after the December tweak, as investors suspect the sustainability of YCC.

“While either means are possible, widening of the range would be more natural if the BOJ were to attribute the tweak to improvement of market functionality,” said Masamichi Adachi, a UBS chief economist.

Half of 24 respondents expected the additional YCC tweak in April-June. Seven anticipated it in the latter half of 2023, while three saw it in the first half of 2024.

KURODA’S LAST SURPRISE?

Governor Kuroda is unlikely to jolt the market at his final BOJ policy meeting on March 9-10, according to 96% of 28 respondents to a question, saying the nominated next chief Ueda is better positioned to carry out any review or revamp of Kuroda-era monetary easing.

Only one economist expected a surprise move this week. “Waiting until the April meeting to end the YCC risks another large speculative attack on the yield ceiling which would force the BOJ to buy more JGBs and worsen bond market functioning further,” said Darren Tay at Capital Economics.

Sources familiar with the BOJ’s thinking have told Reuters the central bank is unlikely to make major changes to the YCC given uncertainty over whether wages would rise enough to keep inflation sustainably around its 2% target.

Another poll question allowing multiple answers showed 17 of 27 respondents said an inflation outlook for next fiscal year and beyond surpassing 2% will urge the BOJ to normalise its massive easing.

Thirteen economists selected a positive turn in Japan’s output gap as a trigger for normalisation. Eleven chose wages outstripping consumer inflation and seven pointed out clearer side-effects of the BOJ policy seen in the bond market.

Analysts’ projections for Japan’s economic growth and consumer inflation were mostly unchanged from a February poll, according to the median estimates of around 30 respondents.

(Click here for other stories from the Reuters global economic poll)

(Reporting by Kantaro Komiya and Eimi Yamamitsu; Polling by Vijayalakshmi Srinivasan and Veronica Khongwir; Editing by Sam Holmes)

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KABUL (Reuters) – Female employment in Afghanistan has dropped by a quarter after the Taliban took over the country, according to estimates from the International Labour Organisation (ILO), which said the fall was exacerbated by restrictions on women working and studying.

The ILO said the 25% drop in female employment took place by the final quarter of 2022 from the second quarter of 2021, compared with a 7% drop for men. The Taliban took over the country in August 2021 as foreign forces withdrew.

“Restrictions on girls and women have severe implications for their education and labour market prospects,” said Ramin Behzad, the Senior Coordinator for Afghanistan at the ILO, in a statement accompanying its assessment for 2022 of Afghanistan.

Taliban authorities have barred most girls from high school, stopped women from attending universities and most female NGO workers from working.

Afghanistan’s economy has also been plunged into a crisis that has wiped out jobs. Following the Taliban takeover, foreign governments withdrew development aid and froze the country’s central bank assets.

The ILO estimated GDP had contracted by 30-35 per cent across 2021 and 2022.

Taliban officials have called on the international community to unfreeze its assets to ease the country’s liquidity crisis and have said they are focused on encouraging trade and investment to create economic self-sufficiency.

Youth unemployment had also shrunk by an estimated 25% for those aged between 15 and 24. The ILO noted that total employment had shown some signs of recovery in the first half of 2022, but that it had decreased for young men and all women over the year.

“Some women moved into self-employed activities, such as farming…or repairing clothes, thereby contributing to household income and preventing female employment from falling by even more,” the ILO’s report said.

(Reporting by Charlotte Greenfield in Kabul; Editing by Raju Gopalakrishnan)

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By Selena Li

HONG KONG (Reuters) – Credit Suisse has received regulatory green light from China after years of waiting to launch a full-fledged wealth management business in the world’s second-biggest economy, according to a company memo reviewed by Reuters.

The expansion comes after the lender suffered worse-than-expected global wealth outflows of 92.7 billion Swiss francs ($98.29 billion) in the fourth quarter.

The Swiss bank is pushing to roll out the wealth business in China by the first half of this year, according to the memo which was confirmed by a company spokesperson, targeting a 27 trillion yuan market.

Credit Suisse Securities (China), the company’s China joint venture, recently obtained an investment consultancy license, which allows it to create and distribute equity research products onshore and to engage in investment advisory services, according to the memo.

The firm also scored approvals for proprietary trading and an expansion in its brokerage licence enabling it to serve clients nationwide, having previously been confined to the southern city of Shenzhen.

“We are pleased to have received these licenses as it marks a key milestone in offering wealth management services onshore in China, which is the fastest growing wealth market in the world,” Edwin Low, APAC CEO of Credit Suisse told Reuters in an email statement.

Credit Suisse “plans to double the number of relationship managers in China in 2023,” said Benjamin Cavalli, the company’s head of wealth management for Asia Pacific, without providing details on how many relationship managers it currently has.

The boost of wealth headcounts comes in sharp contrast to a layoff it launched in November following a global overhaul since October that led to spinoffs and job cuts.

Sources told Reuters the move affected about one-third of its China-based investment banking team and nearly half of its research department which are based in Hong Kong and China.

Total assets at Credit Suisse’s wealth division fell to 540.5 billion Swiss francs by the end of last year from 742.6 billion francs a year earlier.

The bank has offered higher deposit rates than its rivals to attract new funds from wealthy clients in Asia.

($1 = 0.9431 Swiss francs)

(Reporting by Selena Li; Editing by Simon Cameron-Moore)

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TOKYO (Reuters) – Progress has been made on improving working conditions for women in Japan but more must be done, Japan’s chief cabinet secretary said on Wednesday, adding that social attitudes about gender equality were poor.

Japan ranked 116 out of 146 countries on gender parity in the World Economic Forum’s global report last year, and efforts to promote women in management and government have stalled. There are only two women cabinet ministers among the 20 members of Prime Minister Fumio Kishida’s cabinet.

Women often find it particularly difficult to balance work and household duties, still broadly seen as the woman’s responsibility, forcing many into unstable and lower-paying “temporary” contract work.

“The situation for women, who are trying to balance household and workplace responsibilities is quite difficult in our country and has been noted as an issue,” chief cabinet secretary Hirokazu Matsuno told a regular news conference.

“Based on measures we’ve taken, jobs for women have increased. But it’s also true that many switch to temporary work when they give birth, and measures to tackle this are still just halfway complete,” he said, adding that he was aware much needed doing in order to change social attitudes about gender.

According to a survey published in the Sankei Shimbun daily, 65% of women said they put a low priority on time for themselves in order to fulfil both sets of responsibilities, compared to 42% of men.

Women did 80% of the cooking, compared to 8% of men, and other household chores had a similar weighting. The only job men did more than women was taking out the rubbish, at 49% to 43%.

(Reporting by Elaine Lies)

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By Heekyong Yang

SEOUL (Reuters) – South Korea’s trade minister will meet with counterparts in Washington this week to express concerns that the U.S. Chips Act could make the U.S. a less attractive investment destination, its trade ministry said.

During his trip, South Korea’s trade minister Ahn Duk-geun plans to meet with senior officials from the U.S. Commerce Department and White House as well as officials from major think tanks to discuss the Chips Act.

The Biden administration last month said it would require companies winning $52.7 billion of available funds from the Chips Act to share excess profits and explain how they plan to provide affordable childcare.

The Chips Act plays a central role in the Biden administration’s effort to bring semiconductor manufacturing home, and its success is vital to U.S. ambitions to keep ahead of China in global markets.

While the incentives are crucial for chipmakers’s investment decisions, some of the conditions for receiving the subsidies are putting South Korean chipmakers Samsung Electronics Co Ltd and SK Hynix Inc in a difficult position as they decide whether to apply for funding, South Korean government officials said.

“The South Korean government will make it clear that the conditions of the Chips Act could deepen business uncertainties, violate companies’ management and technology rights as well as make the United States less attractive as an investment option,” South Korea’s trade ministry said.

Under the Chips Act, companies that accept the incentives are required to share with the U.S. government a portion of their profits that exceed initial projections by an agreed-upon threshold.

Companies winning chips subsidies would be barred from engaging in joint research and technology licensing efforts or expanding semiconductor manufacturing capacity in foreign countries of concern like China for 10 years. Both Samsung Electronics and SK Hynix operate chip factories in China.

Chipmakers are also concerned about requirements to turn over information about profit projections and operations, because they are considered trade secrets, analysts said.

(Reporting by Heekyong Yang; Editing by Jamie Freed)

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By David Shepardson

WASHINGTON (Reuters) -President Joe Biden’s nominee for a key fifth seat on the Federal Communications Commission (FCC), Gigi Sohn, withdrew on Tuesday, dealing a setback for Democrats who have been unable to take control of the telecom regulator for more than two years.

Sohn confirmed Tuesday she was withdrawing after Democratic Senator Joe Manchin said he would vote against confirming her.

“We appreciate Gigi Sohn’s candidacy for this important role. She would have brought tremendous intellect and experience,” White House spokeswoman Karine Jean-Pierre said on Tuesday adding her withdrawal was “clearly unfortunate.”

Since January 2021, Democrats have been unable to command a majority of the five-member FCC, stalling the party’s efforts to reinstate landmark net neutrality rules revoked under Republican President Donald Trump. The open internet laws seek to bar internet service providers from blocking or slowing traffic or offering paid fast lanes.

“The FCC deadlock, now over two years long, will remain so for a long time,” Sohn said in a statement. “Unfortunately the American people are the real losers here. As someone who has advocated for my entire career for affordable, accessible broadband for every American, it is ironic that the 2-2 FCC will remain sidelined at the most consequential opportunity for broadband in our lifetimes.”

Democrats hold a narrow 51-49 majority in the U.S. Senate but two Democrats are currently absent because of health issues.

Sohn who was first nominated in October 2021, had her third hearing before the Senate Commerce Committee in February.

Sohn said in 2021 she “could not have imagined that legions of cable and media industry lobbyists, their bought-and-paid-for surrogates, and dark money political groups with bottomless pockets would distort my over 30-year history as a consumer advocate into an absurd caricature of blatant lies.”

Republicans in February offered a sweeping denunciation of Sohn on a number of grounds and accused her of misleading Congress, which she rejected.

Many Democrats said Republicans were doing the bidding of powerful telecom companies that did not want to face regulation from the FCC.

Republican Senator Ted Cruz said Tuesday Sohn’s withdrawal demonstrates the need for a nominee “committed to serving as an even-handed and truly independent regulator.”

In July 2021, Biden signed an executive order encouraging the FCC to reinstate the open internet net neutrality rules.

At least two other Democrats were undecided on Sohn’s nomination.

Sohn joins several other high-profile Biden nominees who withdrew from consideration, including Neera Tanden, who had been tapped to lead the Office of Management and Budget and Sarah Bloom Raskin, who was nominated to become the top bank regulator at the Federal Reserve.

(Reporting by David Shepardson and Katharine Jackson; additional reporting by Andrea Shalal; writing by Rami Ayyub; Editing by Bill Berkrot, Leslie Adler and Raju Gopalakrishnan)

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(Reuters) – A ballot measure to legalize recreational use of marijuana for adults in Oklahoma and establish an excise tax on cannabis sales in the state appeared headed for a resounding defeat at the polls on Tuesday, according to state election returns.

With the overwhelming majority of precincts reporting, just over 62% of voters had cast ballots against the recreational pot legalization measure known as Question 820, compared with nearly 38% who supported it, the state’s unofficial results showed.

The vote came nearly five years after Oklahoma voters approved legalizing cannabis for medical purposes.

The measure would have made it legal for adults 21 and older to purchase and possess up to an ounce of marijuana, and to grow as many as six mature cannabis plants for personal use.

It also would have placed a 15% tax on sales of all recreational marijuana products, with revenues divvied up between municipalities and the state’s general fund, public education grants and substance abuse programs.

The existing state medical marijuana authority would have been tasked with regulating and licensing commercial cannabis businesses.

In addition, individuals already convicted of low-level marijuana offenses that the measure proposed to make legal could have sought re-sentencing or have their records expunged.

As of this year, 21 other U.S. states have fully legalized marijuana for adults, according to a Reuters tally, but cannabis remains classified as an illegal narcotic under federal law.

Advocates of liberalized marijuana laws argue that criminalization of low-level possession squanders law enforcement resources and disproportionately affects people of color. Taxing cannabis, they argue, would generate millions of dollars in new state revenues.

Opponents say legalizing pot can lead to increases in crime, automobile and workplace accidents and a rise in drug use among children.

(Reporting by Steve Gorman in Los Angeles. Editing by Gerry Doyle)

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SYDNEY (Reuters) – The United Kingdom is set to ratify a controversial free-trade agreement with Australia as soon as this month, the country’s High Commissioner to Australia said on Wednesday.

Signed in 2021, the deal has been criticized by some UK officials for being “one-sided”, including Prime Minister Rishi Sunak when on the campaign trail for the top job last year.

British High Commissioner Vicki Treadell said on Tuesday the deal should return to the House of Commons from the House of Lords by March 12th or 13th where it would need another two or three weeks to pass. Further debate could delay the process, she added.

“The moment that is done, because you beat us to it at the end of your last sitting week of the last calendar year, if both countries having completed our parliamentary processes, it should come into effect pretty soon afterwards.”

Australia ratified the agreement last November.

The agreement will remove tariffs and harmonise rules and standards on bilateral trade, which hit A$29 billion ($19 billion)in 2019-2020.

The deal was projected in 2021 to boost trade by over 10 billion pounds ($11.8 billion) “in the long run”, opening up sectors like agriculture and allowing freer movement for service-sector professionals.

The deal comes into force 30 days after both parties notify each other of parliamentary ratification or on another mutually agreed date.

($1 = 1.5207 Australian dollars)

($1 = 0.8465 pounds)

(Reporting by Lewis Jackson; Editing by Kim Coghill)

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By Daniel Trotta

(Reuters) – The Memphis City Council on Tuesday approved a series of police reforms in the wake of the death of Tyre Nichols following his beating by police during a Jan. 7 traffic stop, with more far-reaching measures under consideration.

The ordinances create an annual review of police training techniques, require police to use only marked vehicles for routine traffic stops, strengthen citizen review boards, and require more police data collection.

The death of Nichols, 29, an unarmed Black man, prompted outrage and calls for change. Nationwide, police have come under increasing pressure to alter their practices since the 2020 death in Minneapolis of George Floyd, another African American who died at the hands of the police.

In the Nichols case, five officers, all Black, have been charged with second-degree murder.

Police yanked him from his car and immediately shouted vulgarity-laced orders and threatened him with bodily harm.

Officers went on to beat and kick Nichols, spray him with pepper spray and hit him with a baton on the streets near his Memphis home, as Nichols cried out for his mother.

The violence of the beating was revealed in four separate videos of the incident totaling about 67 minutes that the city released on Jan. 27.

Another 20 hours of video will be released on Wednesday, Memphis Chief Legal Officer Jennifer Sink told a city council committee earlier on Tuesday.

The ordinances approved on Tuesday passed a required third reading before the council, including one that mandates police use only marked patrol cars for routine traffic stops.

After that ordinance passed, reform supporters in the audience chanted, “Justice for Tyre!” Some officers in the Nichols case drove unmarked cars and formed part of a special unit that has since been disbanded.

Other measures passed would strengthen the role of citizen review boards, even though pending state legislation would strip power from such panels, potentially rendering the city’s action irrelevant.

A more far-reaching reform named the “Tyre Nichols Justice in Policing Ordinance” passed a first reading but needs to be heard by the council two more times to get approved. Those measures would ban racial profiling, require police to intervene when their colleagues use excessive force, and oblige police to offer assistance to suspects in danger or distress.

Even before the new rules, 13 officers came under investigation for their conduct in the Nichols chose, said Sink, city’s legal officer, who told the committee that the city’s investigation had concluded.

Seven of those 13 officers were fired, three were suspended, two had charges dismissed, and one resigned in lieu of termination, Sink said.

Of the five officers facing criminal charges, all of them pleaded not guilty and have been released on bail.

(Reporting by Daniel Trotta)

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By Kantaro Komiya and Tetsushi Kajimoto

TOKYO (Reuters) – Japan’s real wages fell the most in nearly nine years in January, official data showed, as four-decade-high inflation squeezed the purchasing power of consumers and undercut efforts by policymakers to revive a COVID-ravaged economy.

Wage trends in the world’s third-largest economy are under close market scrutiny because Bank of Japan officials have said that pay hikes, combined with 2% inflation, are essential to it scaling back its loose monetary policy.

The central bank is set to maintain its ultra-low interest rates at a policy review on Friday, as it awaits a leadership transition that could eventually end outgoing head Haruhiko Kuroda’s radical stimulus.

Inflation-adjusted real wages, a barometer of households’ purchasing power, fell by 4.1% in January from a year earlier, the largest decrease since May 2014, labour ministry data showed on Tuesday. It followed a revised 0.6% drop in December.

“Real wages have probably hit the bottom in January as government subsidies on electricity and gas charges have taken effect in February and base effects of commodity price hikes have run their course,” said Azusa Kato, senior economist at BNP Paribas Securities.

“Given that wage hikes are gathering momentum towards the annual labour negotiations this month, the Bank of Japan will come under pressure to tweak its yield curve control as early as this week. Even if it stands pat, it will stay under pressure.”

The fall in real wages comes as major Japanese firms including Toyota, Nintendo and Fast Retailing pay heed to policymakers’ calls and union demands by announcing plans for historic pay rises.

Japan’s economy averted recession in the fourth quarter but rebounded much less than expected, delaying a recovery from the scars of the COVID-19 pandemic.

Total cash earnings, or nominal wages, posted a 0.8% year-on-year gain in January, the data showed, much weaker than a revised 4.1% growth in December, when strong one-off winter bonuses drove up overall salaries.

The feeble nominal growth in wages in January was well short of the 5.1% consumer inflation rate used to calculate pay in real terms. The inflation rate excludes owners’ equivalent rent.

Currently, Japan’s core consumer inflation, which excludes volatile fresh food prices but includes oil products, is running at 4.2%, the fastest pace since 1981.

Overtime pay, a gauge of business activity strength, rose 1.1% year-on-year in January, its weakest growth in 22 months.

Special payments fell by 1.7% in January, after a revised 6.5% growth in the previous month. The indicator tends to be volatile on months other than the bi-annual bonus seasons of November to January and June to August.

The following table shows preliminary data for monthly incomes and number of workers in January:

—————————————————————-

Payments (amount) (yr/yr % change)

Total cash earnings 276,857 yen ($2,035) +0.8

-Monthly wage 265,800 yen +0.8

-Regular pay 247,153 yen +0.8

-Overtime pay 18,647 yen +1.1

-Special payments 11,057 yen -1.7

—————————————————————-

Number of workers (million) (yr/yr % change)

Overall 51.693 +1.6

-General employees 35.222 +0.9

-Part-time employees 16.471 +3.0

—————————————————————-

The ministry defines “workers” as 1) those employed for more than one month at a company that employed more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.

To view the full tables, see the labour ministry’s website at:

($1 = 136.0100 yen)

(Reporting by Kantaro Komiya and Tetsushi Kajimoto; Graphics by Pasit Kongkunakornkul; Editing by Alexander Smith)

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By Tetsushi Kajimoto

TOKYO (Reuters) -Japan logged its largest current account deficit ever in January as a combination of global slowdown and China’s Lunar New Year holidays undermined the country’s ability to earn from trade.

The trade balance, a part of the current account, also hit a record deficit.

The current account deficit, at 1.98 trillion yen ($14.43 billion), was more than double a median market forecast of 818.4 billion yen. It was the biggest on record, the government said, reporting the figures on Wednesday.

January was the second straight month in which the current account balance was weaker than a year earlier, the Ministry of Finance data showed, illustrating Japan’s waning strength in international trade.

But the primary income balance, another element of the current account, rose 350 billion yen from a year earlier to a 2.29 trillion yen surplus in January, driven by interest received from its investment in foreign securities.

That reflected the trend in which the country is increasingly earning income from capital parked abroad rather than by sales of goods and services.

The trade deficit, 3.18 trillion yen, was the largest since relevant data became available in 1996, the statistics showed.

The data pushed the dollar to 137.49 yen, its highest level since mid-December. That added to a dollar surge driven by Federal Reserve Chairman Jerome Powell’s reaffirmation on Tuesday of the Fed’s determination to bring inflation down to its 2% target rate.

The current account data also highlights the pain that stubbornly high energy costs are inflicting on Japan’s economy, the world’s third biggest, which relies heavily on imports of fuel and raw materials.

Exports also suffered in January from slowing foreign demand, including in China, Japan’s largest trading partner, amid a global wave of monetary tightening aimed at restraining inflation.

China’s Lunar New Year holidays, which temporarily reduce that country’s imports, occurred in January this year. Last year they were in February.

Japan’s January import bill was pushed higher by elevated prices of fuel and other commodities, partly a result of weakness of the yen and Russia’s invasion in Ukraine. That overwhelmed a smaller rise in exports.

Japan’s position as export powerhouse has waned in recent years, in part because companies have moved much production overseas.

($1 = 137.2200 yen)

(Reporting by Tetsushi Kajimoto; Additional reporting by Leika Kihara; Editing by Edmund Klamann and Bradley Perrett)

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By Eduardo Baptista and Greg Torode

BEIJING/HONG KONG (Reuters) -China needs the capability to shoot down low-earth-orbit Starlink satellites and defend tanks and helicopters against shoulder-fired Javelin missiles, according to Chinese military researchers who are studying Russia’s struggles in Ukraine in planning for possible conflict with U.S.-led forces in Asia.

A Reuters review of almost 100 articles in more than 20 defence journals reveals an effort across China’s military-industrial complex to scrutinise the impact of U.S. weapons and technology that could be deployed against Chinese forces in a war over Taiwan.

The Chinese-language journals, which also examine Ukrainian sabotage operations, reflect the work of hundreds of researchers across a network of People’s Liberation Army (PLA)-linked universities, state-owned weapons manufacturers and military intelligence think-tanks.

While Chinese officials have avoided any openly critical comments about Moscow’s actions or battlefield performance as they call for peace and dialogue, the publicly available journal articles are more candid in their assessments of Russian shortcomings.

China’s defence ministry did not respond to a request for comment about the researchers’ findings. Reuters could not determine how closely the conclusions reflect the thinking among China’s military leaders.

Two military attaches and another diplomat familiar with China’s defence studies said the Communist Party’s Central Military Commission, headed by President Xi Jinping, ultimately sets and directs research needs, and that it was clear from the volume of material that Ukraine was an opportunity the military leadership wanted to seize. The three people and other diplomats spoke to Reuters on the condition of anonymity because they were not authorised to discuss their work publicly.

A U.S. defence official told Reuters that despite differences with the situation in Taiwan, the Ukraine war offered insights for China.

“A key lesson the world should take away from the rapid international response to Russia’s invasion of Ukraine is that aggression will increasingly be met with unity of action,” said the official, who spoke on the condition of anonymity because of the topic’s sensitivity, without addressing concerns raised in the Chinese research about specific U.S. capabilities.

STARLINK GAZING

Half a dozen papers by PLA researchers highlight Chinese concern at the role of Starlink, a satellite network developed by Elon Musk’s U.S.-based space exploration company SpaceX, in securing the communications of Ukraine’s military amid Russian missile attacks on the country’s power grid.

“The excellent performance of ‘Starlink’ satellites in this Russian-Ukrainian conflict will certainly prompt the U.S. and Western countries to use ‘Starlink’ extensively” in possible hostilities in Asia, said a September article co-written by researchers at the Army Engineering University of the PLA.

The authors deemed it “urgent” for China – which aims to develop its own similar satellite network – to find ways to shoot down or disable Starlink. SpaceX did not respond to a request for comment.

The conflict has also forged an apparent consensus among Chinese researchers that drone warfare merits greater investment. China has been testing drones in the skies around Taiwan, a self-ruled democracy that Beijing has vowed to bring under its control.

“These unmanned aerial vehicles will serve as the ‘door kicker’ of future wars,” noted one article in a tank warfare journal published by state-owned arms manufacturer NORINCO, a supplier to the PLA, that described drones’ ability to neutralise enemy defences.

While some of the journals are operated by provincial research institutes, others are official publications for central government bodies such as the State Administration of Science, Technology and Industry for National Defence, which oversees weapons production and military upgrades.

An article in the administration’s official journal in October noted that China should improve its ability to defend military equipment in view of the “serious damage to Russian tanks, armored vehicles and warships” inflicted by Stinger and Javelin missiles operated by Ukrainian fighters.

Collin Koh, a security fellow at Singapore’s S. Rajaratnam School of International Studies, said the Ukrainian conflict had provided impetus to long-standing efforts by China’s military scientists to develop cyber-warfare models and find ways of better protecting armour from modern Western weapons.

“Starlink is really something new for them to worry about; the military application of advanced civilian technology that they can’t easily replicate,” Koh said.

Beyond technology, Koh said he was not surprised that Ukrainian special forces operations inside Russia were being studied by China, which, like Russia, moves troops and weapons by rail, making them vulnerable to sabotage.

Despite its rapid modernisation, the PLA lacks recent combat experience. China’s invasion of Vietnam in 1979 was its last major battle – a conflict that rumbled on until the late 1980s.

Reuters’ review of the Chinese journals comes amid Western concern that China may be planning to supply Russia with lethal aid for its assault on Ukraine, which Beijing denies.

TAIWAN, AND BEYOND

Some of the Chinese articles stress Ukraine’s relevance given the risk of a regional conflict pitting China against the United States and its allies, possibly over Taiwan. The U.S. has a policy of “strategic ambiguity” over whether it would intervene militarily to defend the island, but is bound by law to provide Taiwan with the means to defend itself.

U.S. Central Intelligence Agency Director William Burns has said that Xi has ordered his military to be ready to invade Taiwan by 2027, while noting that the Chinese leader was probably unsettled by Russia’s experience in Ukraine.

One article, published in October by two researchers at the PLA’s National Defence University, analysed the effect of U.S. deliveries of high-mobility artillery rocket systems (HIMARS) to Ukraine, and whether China’s military should be concerned.

“If HIMARS dares to intervene in Taiwan in the future, what was once known as an ‘explosion-causing tool’ will suffer another fate in front of different opponents,” it concluded.

The article highlighted China’s own advanced rocket system, supported by reconnaissance drones, and noted that Ukraine’s success with HIMARS had relied on U.S. sharing of target information and intelligence via Starlink.

Four diplomats, including the two military attaches, said PLA analysts have long worried about superior U.S. military might, but Ukraine has sharpened their focus by providing a window on a large power’s failure to overwhelm a smaller one backed by the West.

While that scenario has obvious Taiwan comparisons, there are differences, particularly given the island’s vulnerability to a Chinese blockade that could force any intervening militaries into a confrontation.

Western countries, by contrast, are able to supply Ukraine by land via its European neighbours.

References to Taiwan are relatively few in the journals reviewed by Reuters, but diplomats and foreign scholars tracking the research say that Chinese defence analysts are tasked to provide separate internal reports for senior political and military leaders. Reuters was unable to access those internal reports.

Taiwanese Defence Minister Chiu Kuo-cheng said in February that China’s military is learning from Russia’s invasion of Ukraine that any attack on Taiwan would have to be swift to succeed. Taiwan is also studying the conflict to update its own battle strategies.

Several articles analyse the strengths of the Ukrainian resistance, including special forces’ sabotage operations inside Russia, the use of the Telegram app to harness civilian intelligence, and the defense of the Azovstal steel plant in Mariupol.

Russian successes are also noted, such as tactical strikes using the Iskander ballistic missile.

The journal Tactical Missile Technology, published by state-owned weapons manufacturer China Aerospace Science and Industry Corporation, produced a detailed analysis of the Iskander, but only released a truncated version to the public.

Many other articles focus on the mistakes of Russia’s invading army, with one in the tank warfare journal identifying outdated tactics and a lack of unified command, while another in an electronic warfare journal said Russian communications interference was insufficient to counter NATO’s provision of intelligence to the Ukrainians, leading to costly ambushes.

A piece published this year by researchers at the Engineering University of the People’s Armed Police assessed the insights China could glean from the blowing-up of the Kerch Bridge in Russian-occupied Crimea. The full analysis has not been released publicly, however.

Beyond the battlefield, the work has covered the information war, which the researchers conclude was won by Ukraine and its allies.

One February article by researchers at the PLA Information Engineering University calls on China to preemptively prepare for a global public opinion backlash similar to that experienced by Russia.

China should “promote the construction of cognitive confrontation platforms” and tighten control of social media to prevent Western information campaigns from influencing its people during a conflict, it said.

(Reporting by Eduardo Baptista in Beijing and Greg Torode in Hong Kong; additional reporting by Idrees Ali and Phil Stewart in Washington. Editing by David Crawshaw.)

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By Ryan Woo

BEIJING (Reuters) -The United States should change its “distorted” attitude towards China or “conflict and confrontation” will follow, China’s foreign minister said on Tuesday, while defending its stance on the war in Ukraine and its close ties with Russia.

The U.S. had been engaging in suppression and containment of China rather than engaging in fair, rules-based competition, Foreign Minister Qin Gang told a news conference on the sidelines of an annual parliament meeting in Beijing.

“The United States’ perception and views of China are seriously distorted,” said Qin, a trusted aide to President Xi Jinping and until recently China’s ambassador in Washington.

“It regards China as its primary rival and the most consequential geopolitical challenge. This is like the first button in the shirt being put wrong.”

Relations between the two superpowers have been tense for years over a number of issues including Taiwan, trade and more recently the war in Ukraine, but they worsened last month after the United States shot down a balloon off the U.S. East Coast that it says was a Chinese spying craft.

The U.S. says it is establishing guardrails for relations and is not seeking conflict but Qin said what that meant in practice was that China was not supposed to respond with words or action when slandered or attacked.

“That is just impossible,” Qin told his first news conference since becoming foreign minister in late December.

Qin’s comments struck the same the tough tone of his predecessor, Wang Yi, now China’s most senior diplomat after being made director of the Foreign Affairs Commission Office at the turn of the year.

“If the United States does not hit the brakes, and continues to speed down the wrong path, no amount of guardrails can prevent derailment, which will become conflict and confrontation, and who will bear the catastrophic consequences?”

In Washington, John Kirby, the White House national security spokesperson, brushed off the criticism and said the United States does not seek confrontation with Beijing.

“We seek a strategic competition with China. We do not seek conflict,” Kirby told reporters. “We aim to compete and we aim to win that competition with China but we absolutely want to keep it at that level.”

U.S. officials often speak of establishing guardrails in the bilateral relationship to prevent tensions from escalating into crises.

Qin likened Sino-U.S. competition to a race between two Olympic athletes.

“If one side, instead of focusing on giving one’s best, always tries to trip the other up, even to the extent that they must enter the Paralympics, then this is not fair competition,” he said.

‘JACKALS AND WOLVES’

During a nearly two-hour news conference in which he answered questions submitted in advance, Qin made a robust defence of “wolf warrior diplomacy”, an assertive and often abrasive stance adopted by China’s diplomats since 2020.

“When jackals and wolves are blocking the way, and hungry wolves are attacking us, Chinese diplomats must then dance with the wolves and protect and defend our home and country,” he said.

Qin also said that an “invisible hand” was pushing for the escalation of the war in Ukraine “to serve certain geopolitical agendas”, without specifying who he was referring to.

He reiterated China’s call for dialogue to end the war.

China struck a “no limits” partnership with Russia last year, weeks before its invasion of Ukraine, and has blamed NATO expansion for triggering the war, echoing Russia’s complaint.

China has declined to condemn the invasion and has fiercely defended its stance on Ukraine, despite Western criticism of its failure to single Russia out as the aggressor.

China has also vehemently denied U.S. accusations that it has been considering supplying Russia with weapons.

ADVANCING RELATIONS WITH MOSCOW

Qin said China had to advance its relations with Russia as the world becomes more turbulent and close interactions between President Xi Jinping and his Russian counterpart, Vladimir Putin, anchored the neighbours’ relations.

He did not give a definite answer when asked if Xi would visit Russia after China’s parliament session, which goes on for one more week.

Since Russia invaded its southwestern neighbour a year ago Xi has held talks several times with Putin, but not with his Ukrainian counterpart. This undermines China’s claim of neutrality in the conflict, Kyiv’s top diplomat in Beijing said last month.

Asked whether it was possible that China and Russia would abandon the U.S. dollar and euro for bilateral trade, Qin said countries should use whatever currency was efficient, safe and credible.

China has been looking to internationalise its currency, the yuan, which gained popularity in Russia last year after Western sanctions shut Russia’s banks and many of its companies out of the dollar and euro payment systems.

“Currencies should not be the trump card for unilateral sanctions, still less a disguise for bullying or coercion,” Qin said.

(Reporting by Yew Lun Tian, Laurie Chen, Ryan Woo and the Beijing Newsroom; additional reporting by Steve Holland in Washington; Writing by Martin Quin Pollard; Editing by Lincoln Feast, Tom Hogue and Alex Richardson)

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By Lidia Kelly

(Reuters) – Russia will not play “dangerous gender games”, the head of its upper house of parliament said in a vehement attack on sexual minorities in a message marking International Women’s Day, one of the most celebrated public holidays in the country.

Making any expression of a lesbian, gay, bisexual and transgender (LGBT) lifestyle is almost impossible in Russia, which under its “gay propaganda” law bans the distribution of materials on non-traditional relationships among any age group and the promotion of homosexual relationships to children.

There are people with gender “anomalies” but the “tyranny of minorities” cannot happen, said Valentina Matviyenko, a staunch ally of President Vladimir Putin and as the Federation Council’s chair considered Russia’s most powerful woman.

“Men and women are the biological, social and cultural backbones of communities,” Matviyenko wrote in a blog on the Council’s website.

“Therefore, there are no dangerous gender games in our country and never will be. Not in kindergartens, not in schools, not in education, not in politics, not in lawmaking. Let us leave it to the West to conduct this dangerous experiment on itself.”

Russian authorities say they are defending morality in the face of un-Russian liberal values promoted by the West, but human rights activists say the gay propaganda law has been broadly applied to intimidate Russia’s LGBT community.

‘MOST BELOVED’

The Ukraine-born Matviyenko called March 8 one of the “most beloved holidays” in Russia, while politicians and officials rushed with effusive wishes for Women’s Day.

“We know how much in life depends on you, our dear women, on your efforts and your spiritual generosity, how much energy you put to care for children, and so that love, comfort and harmony may reign in the family,” Putin said in a congratulatory video published on the Kremlin’s Telegram channel.

He issued special thanks to female military personnel, saying their courage amazes even the “most hardened fighters”.

Russia has been waging war on Ukraine for a year with no end in sight. Kyiv and its allies call it an imperialistic land grab that has seen thousands killed, millions of Ukrainians displaced and cities and villages reduced to rubble.

The International Women’s Day holiday was first celebrated in Russia 110 years ago and is one of its most important holidays, next to welcoming the New Year and the Victory Day.

While filled with public and private celebrations, flowers and gifts, it has nothing to do with the feminist movement for protection of women’s rights. 

The constitution guarantees equal rights for men and women, but Russian women continue to face inequality and are expected to prioritise motherhood over professional development.

Their situation worsened when Russia decriminalised domestic violence in 2017. According to a 2013 RIA news agency study, up to 36,000 women face violence in the family every day.

(Additonal reporting by Ron Popeski; Writing by Lidia Kelly; Editing by Himani Sarkar)

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By Ali Sawafta

JENIN, West Bank (Reuters) -Israeli forces raided a refugee camp in the West Bank city of Jenin on Tuesday, killing at least six Palestinian gunmen, including a Hamas member suspected of shooting dead two brothers from a Jewish settlement near the village of Huwara.

Early on Wednesday, a rocket launch was identified from the Gaza Strip towards Israel, triggering alarms and sending Israelis running to bomb shelters, though the rocket appeared to have landed inside Gaza and not in Israeli territory, the Israeli military said.

Earlier, witnesses said fighting broke out after residents of the refugee camp saw Israeli soldiers getting out of a furniture truck near a house on a hill overlooking the centre of the sprawling camp and fighters immediately opened fire.

In the ensuing gun battle, Israeli forces surrounded a house where the suspected gunman had barricaded himself with other fighters, and used shoulder-fired missiles against the building, the military said in a statement. The Palestinian health ministry said six Palestinians were killed and at least 16 wounded. One member of the Israeli police force was wounded and three lightly hurt.

The military identified one of the gunmen as Abdel-Fattah Kharusha, a member of the Islamist group Hamas, who it said shot two Israelis while they sat in their car at a checkpoint near the Palestinian village of Huwara in the occupied West Bank on Feb. 26. It said his two sons had been arrested in a raid at the same time on the city of Nablus, another centre of militant activity.

According to statements by Hamas and Islamic Jihad, all those killed were gunmen from the militant groups Hamas, Islamic Jihad and Fatah.

“We call upon the fighters of our people everywhere to escalate armed resistance against the occupation and to fight them everywhere on the land of our occupied home,” Hamas’ armed wing said in a statement.

Hamas, which runs the blockaded Gaza Strip but which also has fighters in the West Bank, said Kharusha was a member and that he carried out the Huwara double killing, the latest in a series of deadly attacks on Israelis by Palestinians this year.

Jenin, one of the major centres of militant activity in the West Bank where armed fighters parade openly, has been raided repeatedly by Israeli forces during months of violence that has caused increasing fears of a repeat of the Intifadas or uprisings of the 1980s and early 2000s.

“The risk – not just to Palestine and to Israel but to the region – of the situation escalating out of hand is significant,” Saudi Arabia’s foreign minister, Prince Faisal bin Farhan Al Saud, told reporters in London.

The shooting of the two Israeli brothers triggered a revenge attack by Jewish settlers who killed a Palestinian man and torched dozens of houses and cars in a rampage described as a “pogrom” by a senior Israeli commander.

The rampage triggered worldwide outrage and condemnation, which was increased when ultra-nationalist Finance Minister Bezalel Smotrich, who has responsibility for aspects of the West Bank administration, said Huwara should be “erased”. Smotrich later offered a partial retraction.

U.S. Secretary of State Antony Blinken reiterated calls for both sides to de-escalate tensions, and the violence is also expected to be raised by Defense Secretary Lloyd Austin this week when he visits Israel.

However, there has been no sign of any let up in the violence, ahead of the start of the Muslim holy month of Ramadan and the Jewish Passover festival.

MORE HUWARA VIOLENCE

A spokesman for Palestinian Authority President Mahmoud Abbas condemned Tuesday’s raid which came after a major reinforcement of Israeli forces in the West Bank following the violence in Huwara, which sits near a major road junction where settlers and Palestinians have frequently clashed.

Despite a crackdown by Israeli police, tensions have continued at Huwara and overnight Israeli settlers attacked Palestinians in the village.

Israeli army and border police forces dispersed what the military described as “a number of violent rioters” in Huwara. Videos shared on social media showed black-clad youths attacking a Palestinian car before its driver manages to pull away.

“My wife was sitting in the back and she hugged our daughter to cover her,” said Omar Khalifa, who had just finished shopping at a supermarket and was in the car with his family. “We could have lost her. There was real danger to our lives.”

Other footage appeared to show Israeli soldiers dancing together with Jewish settlers in the town on what was the Jewish festival of Purim. “Huwara has been conquered, gentlemen!” a voice is heard saying in Hebrew.

The military did not address a question about the footage of soldiers dancing with settlers when it responded to a request for information on the incident. Nor did it immediately respond to a Reuters query on whether there had been any arrests.

Since the beginning of the year, Israeli forces have killed more than 70 Palestinians, including militant fighters and civilians, while in the same period, Palestinians have killed 13 Israelis and one Ukrainian woman in a series of apparently uncoordinated attacks.

(Additional reporting by Nidal al-Mughrabi in Gaza, Dan Williams and Emily Rose in Jerusalem and Alistair Smout in London; Writing by James Mackenzie; Editing by Ed Osmond, Mark Heinrich, Mark Potter and Daniel Wallis)

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By Jonathan Stempel

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc has resumed its purchases of Occidental Petroleum Corp shares after a five-month hiatus, increasing its stake in the oil company to about 22.2%, a regulatory filing showed on Tuesday.

Berkshire paid about $355 million for 5.8 million Occidental shares between March 3 and March 7, according to the filing.

The purchases were the first Berkshire has disclosed since late September. It ended last year with a 21.4% stake.

In August, Berkshire won U.S. Federal Energy Regulatory Commission permission to buy up to 50% of Occidental’s common stock.

Buffett’s company now owns about 200.2 million Occidental shares worth $12.2 billion, based on Tuesday’s closing price of $60.85.

Those shares would generate about $144 million of annual dividends, following a 38% increase that Occidental announced last month.

Berkshire also owns $10 billion of Occidental preferred stock that throws off $800 million of annual dividends, plus warrants to buy another $5 billion of common stock.

Occidental ended January with about 900 million shares outstanding.

Berkshire began buying large quantities of the Houston-based company’s stock about one year ago.

After its stake surpassed 20%, Berkshire adopted the equity method of accounting for its holdings, and now reports its share of Occidental’s results with its own.

Accounting rules normally require the equity method above the 20% threshold, reflecting an assumption that the holder might exert significant influence.

Berkshire ended 2022 with $128.6 billion of cash and equivalents. It plans to keep a $30 billion cushion.

Occidental’s share price more than doubled in 2022, benefiting from higher oil prices after Russia invaded Ukraine.

Though fourth-quarter profit was lower than analysts expected, Occidental said it planned to raise capital spending this year and could repurchase up to $3 billion of stock.

Berkshire also owns dozens of companies including Geico car insurance, the BNSF railroad, consumer brands such as Dairy Queen and Fruit of the Loom, and other stocks including Apple Inc.

(Reporting by Jonathan Stempel in New York; Editing by Jamie Freed)

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CHICAGO (Reuters) -American Airlines is prepared to match the pay rates and profit-sharing formula that rival Delta Air Lines has provided in its new pilot contract, Chief Executive Robert Isom said on Tuesday.

Isom told American pilots that matching Delta’s deal will result in a contract worth more than $7 billion for them.

“A deal like this would be a game changer for our pilots,” he said.

Delta’s pilots last week ratified a new contract that is widely expected to be a benchmark for contract negotiations at rival carriers.

The Atlanta-based carrier’s new contract provides a 34% cumulative pay increase, a lump-sum one-time payment, reduced health insurance premiums and improvements in holiday pay, vacation, company contributions to 401(k) and work rules.

To match Delta’s deal, Isom said American pilots would receive on average pay increases of 21% in the first year of contract. Total pay increases in the fourth year of the contract deal would be 40%, he said.

(Reporting by Rajesh Kumar SinghEditing by Chris Reese and Aurora Ellis)

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By Svea Herbst-Bayliss

NEW YORK (Reuters) -Activist investor Legion Partners Asset Management is pushing for four new directors to join Primo Water Corp’s board, arguing they could help the water company’s share price triple over five years.

Legion nominated experts in water delivery, beverage operations, marketing and capital allocation as director candidates for election to the U.S.-Canadian company’s 10-person board to help reverse “chronic underperformance,” according to a letter seen by Reuters.

“Substantial shareholder-driven change in the boardroom is long overdue and necessary at the 2023 Annual Meeting in order for Primo to achieve its full potential,” Legion’s managing directors, Chris Kiper and Ted White, wrote to fellow Primo Water shareholders.

Legion, which helped place directors onto boards at Bed Bath & Beyond and Kohl’s, said it owns a 1.5% stake in Primo Water and has been an investor in the past.

Legion said it is “very excited” about the company’s future, but is concerned about past performance. It cited questions about why Primo’s customer base has not grown more robustly and about its large capital expenditures and high operating expenses.

Legion estimates the company has spent $220 million on tuck-in acquisitions since 2018 but said “this has translated into near zero customer growth” because the company has not been able to grow its home and office delivery customers substantially.

“If our nominees are elected and their ideas are fully implemented, Primo may be able to triple its share price over the next five years, and produce EBITDA of over $630 million in fiscal 2027,” the letter said. Primo, which is headquartered in Tampa, Florida, is valued at $2.5 billion and its stock price closed at $15.37 last week.

The numbers could improve if the company sold off non-core assets, tactically shrinks its working capital, and adopts a “prudent capital spending program” so the return on invested capital grows to 12% from its current level below 5%, the letter said.

Primo said in a statement to Reuters it was “disappointed and surprised that Legion has decided to take this action without first having a meaningful conversation with us to share its perspective on our Board composition and strategy.”

It added that it has had “no substantive outreach or contact from Legion in two months.”

The company, however, also said it welcomed Legion’s views and is “always open” to ideas that may support its success.

Demand for bottled water is expected to grow strongly in the coming years, research groups say, citing a greater appetite for water instead of carbonated soft-drinks as well as worries about drinking tap water amid concerns about municipal water supplies.

Primo Water offers home and office water delivery, water exchange, where customers return their empty water jugs and buy new ones at retailers, and water refill, its most affordable offering, where customers refill jugs themselves.

Legion nominated Henrik Jelert, former president and chief executive officer of Primo rival ReadyRefresh USA, Lori Tauber Marcus, a former marketing executive at PepsiCo and Keurig Green Mountain, Derek Lewis, a former president of PepsiCo Multicultural Organization, PepsiCo Beverages North America, and Timothy Hasara, chief investment officer of investment management firm Sinnet Capital.

(Reporting by Svea Herbst-Bayliss; additional reporting by Kanjyik Ghosh; Editing by Lincoln Feast and Edwina Gibbs)

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