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Japan, Thailand Sign Free Trade Agreement

Thailand and Japan have signed a free trade pact to boost bilateral trade and Australia's central bank has unexpectedly decided to keep its benchmark interest rate unchanged. Claudia Blume at VOA's Asia News Center has more on these and other stories in our weekly look at business news from the region.

Japan and Thailand signed a free trade agreement scrapping duties on farm products and manufactured goods. About 97 percent of Japanese exports to Thailand and 92 percent of Thai exports to Japan will be tariff-free within 10 years.

Thailand will gradually reduce duties on Japanese cars and automobile parts and immediately scrap tariffs on half of all steel imports from Japan. Tokyo will cut tariffs on Thai boneless and cooked chicken within five years and immediately abolish duties on imports of shrimp and tropical fruits from Thailand.

Japan already has free-trade deals with India, the Philippines and Australia.

Australia's central bank left its benchmark interest rate unchanged, at a six-year high of 6.25 percent. The bank's decision came as a surprise, as economists had predicted a rate hike to stem rising inflation. Last year, the central bank raised borrowing costs three times.

Prime Minister John Howard said on Australian radio that there is no guarantee rates will remain unchanged in coming months.

"I think homebuyers will be happy they haven't gone up, although people who invest their money might have a different view," he said. "And whilst they haven't moved this month, I'm not going to purport to give any guarantees about future months. That'll be a matter for assessment from time to time by the Reserve Bank."

In other news from Australia, retailer Coles Group became the target of one of the country's largest takeover bids. An investor group led by Australian hardware and agricultural company Wesfarmers offered $16 billion for the retail group. Wesfarmers already has an 11 percent stake in Coles.

The bidding consortium also includes Australia's Macquarie Bank and Pemira Holdings, a European private equity firm.

Eight Chinese government agencies launched a yearlong nationwide campaign aimed at reducing illegal transactions in the real estate sector.

Beijing said the campaign is designed to crack down on collusion between local officials and property developers. The ministries will also investigate firms suspected of illegal advertising, price manipulation and tax evasion.

Beijing has introduced a number of measures in the past few years to cool down its overheating property market. Their effect has been limited however as local governments often disregard rules made in the capital.