Japan's central bank today agreed at an emergency monetary policy meeting to respond to the slowing economy and rising yen, which last week hit a 15-year high against the US dollar, by expanding  a special low-interest lending facility.

The Bank of Japan said Japan's economy shows further signs of a moderate recovery, and it is likely to be on a recovery trend. With regard to prices, the year-on-year rate of decline in the CPI (excluding fresh food) has been slowing and is expected to continue to slow. In the meantime, uncertainty about the future, especially for the US economy, has heightened more than before, and the foreign exchange and stock markets have recently been unstable. In these circumstances, the Bank said it judged it necessary to pay more attention to the downside risks to the outlook for Japan's economic activity and prices.

The central bank will boost the amount of funds in its special facility by ¥10trn ($116bn) to a total of ¥30trn and it will be available for 6 months.

Japan’s currency fell to ¥85.41 after dropping to as low as ¥85.91.

Because of the UK public holiday, the world’s biggest market for foreign-exchange trading is closed today.

Infineon/Intel: Infineon Technologies said today it has agreed to sell its wireless unit to US chip giant Intel in a cash deal valued at approximately $1.4bn.

The deal marks the second acquisition in recent weeks for Intel. Two weeks ago, it announced plans to acquire the security technology firm McAfee Inc. for almost $7.7bn in cash.

Infineon’s Wireless Solutions Division, is a unit of the German chip company which mainly supplies to the car industry, and it develops, manufactures and markets end-to-end leading edge semiconductor products and solutions for wireless communications to enable the smooth transmission of voice and high-speed data from the backbone of the telecommunication network infrastructure to the end user’s equipment. Infineon says it offers a mature and fully developed portfolio in Mobile Phone Platforms. This displays a comprehensive portfolio from ultra low cost platforms, to entry and modem solutions for smart phones.

Just before the BoJ announced its decision: Discussing the measures that the Bank of Japan might undertake to curb the yen's rise, with Euan McCreadie, senior corporate dealer at OzForex, speaking with CNBC's Oriel Morrison. Ray Barros, CEO of Ray Barros Trading Group, also charts the dollar-yen cross:

Economic View 1: Plan on Anglo getting closer; Goodbody's chief economist, Dermot O’Leary, comments  -- "A final decision on the future of Anglo Irish Bank is edging closer, with two new stories emerging on the matter over the weekend. Firstly, it appears that the European Commission isn’t overly keen on Anglo’s idea to reinvent itself as a significant player in the SME space, given the competition issues that may emerge. Secondly, according to the Irish Times this morning, the Green Party, the junior partner in coalition in Government, now appears to favour a quicker winding down of the bank.

The report states that they are no longer in favour of either an orderly wind-down over a number of years or the good bank/bad bank plan previously mooted. It is to be discussed at a cabinet meeting on Wednesday, while Anglo is to release its interim results tomorrow. We have commented extensively over the past few weeks about the need to announce a set plan and detailed final cost of the bank.

A final decision by the EC is expected in the next few weeks, but with the bond market pushing Irish yields to record highs (10-year yield at 3.44% over German bunds), an earlier announcement on the matter by the Department of Finance may be required."

Economic View 2: An export-led recovery is still the way out for Ireland; Dermot O’Leary additionally comments - - "It is generally accepted that the recovery in the Irish economy first depends on a pick-up in its external sectors. This in turn depends on an improvement in competitiveness and an increase in foreign demand associated with an international recovery. The former is within Ireland’s control and there have been significant cost reductions in the domestic economy here. Outside of the heightened sovereign concerns of late, the other worrying aspect has been the signs of a slowdown internationally.

Economies that have recovered from crises such as Ireland’s in the past have usually been helped by a devaluation of their currency and an international upturn (the Scandinavian countries in the early 1990s for example). The latest merchandise trade statistics indicate that the value of exports grew by 1% yoy (-4% in Q1) in the second quarter of the year, but imports have picked up, growing by 4% yoy (-12% yoy in Q1). The large decline in imports in 2009 made a big contribution to GDP growth, but this is likely to wane going forward. Full trade data, including services, will not be released until the end of next month, but there is a chance that the trade contribution will not be as large as in recent quarters."

Insight on the Jackson Hole Fed Symposium, with James Bullard, president of the St. Louis Federal Reserve Bank and CNBC's Steve Liesman from Fri Aug 27th:

Downtick in Irish trade surplus underlines exposure to global conditions: Davy economist, Aidan Corcoran, comments -- "Data released on Friday August 27th by the CSO showed a 20% fall in the trade surplus from May to June. While the headline number looks ugly, it is worth noting that a decline of this magnitude in monthly data is not uncommon. The last three years have seen five such falls, and the trade surplus improved significantly over this period. So the blip last month does not necessarily augur a declining current account balance, but it does underline Ireland's exposure to global demand.

The United States may not be Ireland's major trading partner but remains important for Irish exporters, who will follow American cyclical indicators with interest. Following cyclical indicators may not be a reliable indicator of demand, however, given the apparent reluctance of the American consumer to rein in spending on imports. This has led to significant leakage of American fiscal stimulus abroad, i.e. tax incentives to the American consumer have been showing up in other countries' current account balances via the balance of trade. This is good news for an export-oriented economy like Ireland.

A co-ordinated recession in a highly globalised world is something we have never experienced before and brings a new set of challenges. Foremost among these is the avoidance of protectionism, a challenge which policy makers have arguably met. In this context, it is worth bearing in mind that an increase in Irish imports is a contribution, however modest, to the broader recovery.

Markets were focused on Jackson Hole, Wyoming, on Friday in the hope that Chairman Bernanke would provide his own contribution to the recovery. Bernanke reiterated that the Fed has a range of tools available to support the economy but did not seem close to using them. His willingness to discuss further measures was enough to make markets move sideways – a minor coup in view of the high expectations."

Asia Markets

The MSCI Asia-Pacific index rose 1.6% on Monday, having fallen 8.5% since reaching a 20-month high on April 15th.

The Nikkei added 1.63%; China's Shanghai Composite rose 1.57%; Australia's S&P/ASX 200 Index climbed 1.58% and India's Sensex Index gained 0.57%.

Asia benchmarks

In Europe, the Dow Jones Stoxx 600 rose 0.64% Monday.

The ISEQ has added 0.23% in Dublin.

CRH up 1.28%; AIB is off 3.95% and BoI has gained 1.60% and Elan is up 2.80%.

European Benchmarks

Irish Share Prices

Irish Stock Market Capitalisation by Company

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report