The borrowing ceiling for the so-called foreign-exchange special account will be lifted by 5 trillion yen ($56 billion) to 145 trillion yen for the next fiscal year should the parliament approve the proposed 2010 budget. A Finance Ministry official speaking on condition of anonymity said the increase reflects rising earnings on Japan’s $1 trillion of reserves.

Prime Minister Yukio Hatoyama’s administration is struggling to reduce a record debt burden and fulfill pledges to boost spending on childcare and education. The Finance Ministry has already tapped some special accounts that are excluded from the budget to help restrain the fiscal deficit.

“The move probably reflects the government’s aim to increase the transparency and flexibility of using excess money in special accounts” to help find funding sources for the budget, said Susumu Kato, chief Japan economist at Credit Agricole Securities Asia in Tokyo.

Speculation emerged this week that the increase in the ceiling on the bill sales was aimed at increasing the power of the Finance Ministry to intervene in the currency market. While Japan hasn’t stepped into the foreign-exchange market since March 2004, Finance Minister Naoto Kan took office in January saying he was prepared to do so in “emergency situations.”

No Intervention Link

“The increase in the limit has nothing to do with intervention,” said Tohru Sasaki, chief currency strategist at JPMorgan Chase & Co. in Tokyo. Sasaki, who used to work in the foreign-exchange division of the Bank of Japan, said the likelihood of intervention is “extremely low” at a time when the Group of Seven nations is urging China to make its yuan more flexible.

The yen traded at 89.38 per dollar at 4:39 p.m. in Tokyo from 89.02 late yesterday in New York. Japan’s currency reached a 14-year high of 84.83 last November.

The ministry issues short-term bills denominated in yen to finance currency intervention. It also sells the bills to account for profits on foreign reserves in yen. It saves the funds in the special account for addressing currency fluctuations and transfers some of the proceeds to the budget.

Earnings on Reserves

Rising earnings on Japan’s foreign reserves meant that the limit on sales of the securities needed to be lifted, the Finance Ministry official said.

Japan’s reserves, the world’s largest after China’s, have more than tripled in the past decade as the ministry bought U.S. Treasuries and other securities to contain gains in the yen that would hurt exporters. The country’s monetary authorities last stepped into the foreign-exchange market in the first three months of 2004, when they sold 14.8 trillion yen.

The increase in the ceiling is the first since the government raised it by 40 trillion yen for the fiscal 2004 budget, around the time Japanese authorities were last intervening in the currency market.

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All major automakers but Toyota reported higher U.S. sales in February, and most took customers from their powerful Japanese competitor, which has been struggling with a series of massive safety recalls.

Toyota Motor Corp. said its U.S. sales fell 9 percent last month, while Ford, GM, Nissan, Honda and Hyundai all reported double-digit growth compared with February 2009, at the depth of the recession.

The gains may have been even higher without the blizzards that paralyzed the East Coast.

Other winners included Kia Motors Corp. and Subaru. Even struggling Chrysler Group LLC saw improvement. Toyota, by contrast, suspended sales of eight popular models in late January. And it spent last week answering questions from Congress about its safety record.

"We feel we’re getting our fair share of the Toyota business," said Susan Docherty, vice president of marketing at GM, whose sales rose nearly 12 percent.

February was the first full month since Toyota’s decision Jan. 26 to halt sales of some of its vehicles in the U.S. because of safety concerns. Those vehicles went on sale again as dealers repaired them, but Toyota’s image suffered.

Ford Motor Co. posted a 43 percent jump in February U.S. auto sales and outsold General Motors Co. for the first time in nearly a dozen years as it grabbed customers from struggling Toyota. Ford sold 334 more cars than GM in the U free credit report online.S. for the first time since August 1998, when GM was in the midst of a strike.

Most automakers reported that sales to rental car companies and other fleet buyers also were strong as companies began buying again after cutbacks last year. Fleet sales generally mean lower profits to automakers than sales to individuals.

Chrysler, for example, said sales rose half a percent, its first year-over-year monthly increase since December 2007. Car sales rose 38 percent, but truck sales dived 28 percent.

Hyundai Motor Co. said its sales rose 11 percent, driven by sales of the new Tucson small SUV. The company’s redesigned Sonata midsize car saw sales rise 58 percent.

The industry was expecting to see gains over February 2009, which was one of the weakest months in a very depressed year. Sales over President’s Day weekend — which traditionally kicks off the spring selling season — were robust, according to automotive website Edmunds.com.

Still, winter storms at the beginning and end of the month hurt sales on the East Coast and in the Midwest.

"Three and a half feet of snow on these cars," Docherty said. "It took our dealers a bit of time to get all that snow off here and get the customers back into the showrooms."

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But Treasury did not indicate what action it might take or give a timetable, said Fritz Archerd, head of the golf owner’s group, who attended the meeting.

"There’s reason for hope. But there’s also reason for pessimism," Archerd said.

For the past 15 months, the Treasury has blocked the sale of the Kokopelli Golf Course because of the involvement of Zimbabwean national John A. Bredenkamp. He led a group that owned the golf course from 2001 to 2006. He retained a right to future profits when the course was sold again.

The problem is that Bredenkamp was named in late 2008 by Treasury’s Office of Foreign Asset Control to a list of people targeted for economic sanctions. These specially designated nationals, which include al-Qaida terrorists and drug kingpins, are prohibited from conducting any business in the U.S.

Treasury, which has declined to comment on the proceedings, accuses Bredenkamp of "gray-market arms trading and trafficking" and other endeavors to prop up Zimbabwe’s ruling regime.

Archerd said the Kokopelli investment lost about $750,000. A purchase price expected to be about $1 million would be enough to recoup that investment and pay off debt. So no profit would head to Bredenkamp if the golf club were sold to Marion-area owners quick payday loans.

Archerd said his group could no longer afford to invest in the golf club, featuring an 18-hole championship course once voted No. 3 in Illinois by Golf Week magazine. And yet, they cannot sell the course. It’s not even clear if the bank could foreclose on the property with the Treasury’s blocking order.

The plight of this golf course was the subject of a Post-Dispatch article last Sunday.

An economic sanctions attorney not involved in the case said he was surprised Treasury did not offer a solution at the sit-down meeting.

"I don’t understand why this hasn’t moved forward," said Clif Burns with Bryan Cave in Washington.

After Archerd’s meeting, the potential buyers indicated they had lost patience. Marion-area restaurateur David Hays said in a release, "We no longer are optimistic that we will see a timely solution to this dilemma."

Time — and money — does appear to be running out for Kokopelli. Staff already has been cut from 75 to one. The lawnmowers were repossessed last week, so there is no way to maintain fairways and greens. And next week the power company plans to turn out the lights.

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The European Commission is investigating complaints made by Ciao! from Bing, which is a unit of Microsoft (MSFT, Fortune 500); UK price comparison site Foundem; and French legal search engine ejustice.fr, Google said.

The three are arguing that the search firm suppresses the ranking of its competitors in search results.

"The Commission has not opened a formal investigation for the time being," according to a statement released by the executive arm of the European Union. "As is usual when the Commission receives complaints, it informed Google earlier this month and asked the company to comment on the allegations cash advance."

Google (GOOG, Fortune 500), which revealed the inquiry in a post on an official company blog early Wednesday, said that given its growth, it wasn’t surprised its search and search advertising practices were being examined.

"This kind of scrutiny goes with the territory when you are a large company," senior competition counsel Julia Holtz said on the company’s European Public Policy blog.

She said that Google will provide information on the complaints and said that the company is confident its business operates in line with European competition law. 

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Taiwanese gross domestic product rose 9.2 percent in the fourth quarter from a year earlier and the Thai economy expanded 5.8 percent, according to reports today. Malaysian figures for the three months to Dec. 31, due for release on Feb. 24, may show GDP increased 3.4 percent last quarter, according to the median estimate of 14 economists surveyed by Bloomberg News.

Asian economies are paving the way for a global recovery from the worst worldwide recession since the Great Depression after central banks in the region slashed interest rates to record lows and governments increased spending by more than $1 trillion. The strength of Asia’s rebound has seen policy makers lead the way in withdrawing stimulus.

“Asia’s recovery is at least two quarters ahead of the U.S. and monetary authorities have been contemplating exit strategies for some time,” said David Carbon, head of economic and currency research at DBS Group Holdings Ltd. in Singapore. “With higher U.S. rates on the cards, Asia’s central banks can pursue their exit strategies with less to fear on the inflow and currency front.”

Policy makers in China, India and Vietnam are tightening monetary conditions amid signs that accelerating growth is fueling inflation and may led to asset bubbles. The U.S. Federal Reserve, which increased its discount rate by a quarter point to 0.75 percent on Feb. 18, has left its benchmark policy rate unchanged for more than a year.

Rising Demand

Asian stocks jumped by the most since November on speculation Federal Reserve Chairman Ben S. Bernanke will say in a report due to be released this week that U.S. interest rates will be kept low to spur economic growth. The MSCI Asia Pacific Index gained 2.4 percent to 118.14 as of 2 p.m. in Tokyo, the biggest increase since Nov. 30.

The emergence of the world economy from the global recession is encouraging companies in Asia to boost production and hire more workers. Singapore last week raised its economic growth forecast for 2010, predicting an expansion of as much as 6.5 percent this year.

Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp., the world’s largest makers of custom chips, are boosting capital spending this year after fourth- quarter profits beat analysts’ estimates.

‘Very, Very Strong’

Demand has been “very, very strong” in the computer, automotive and consumer electronics sectors over the past few quarters, Richard Han, chief executive officer of Hana Microelectronics Pcl, said in an interview with Bloomberg Television in Bangkok today. Hana makes parts for computers and mobile phones including Apple Inc.’s iPhone.

Taiwan’s fourth-quarter economic growth was the strongest since June 2004 and Thailand’s increase in GDP was the most in seven quarters.

China’s central bank on Feb. 12 ordered lenders to set aside larger reserves, aiming to rein in credit growth after banks extended 19 percent of this year’s 7.5 trillion yuan ($1.1 trillion) lending target in January and property prices climbed the most in 21 months. Goldman Sachs Group Inc. expects the Chinese economy will expand 11.4 percent this year.

Reserve Bank of India Governor Duvvuri Subbarao on Jan. 29 increased the cash reserve ratio to 5.75 percent from 5 percent, exceeding the median forecast for a half-point move in a Bloomberg News survey of economists. India is due to release GDP data for the December quarter on Feb. 26, along with the budget for the next fiscal year.

Emerging Asia

India’s $1.2 trillion economy may grow 7.2 percent in the current fiscal year through March, accelerating for the first time since 2007, the statistics office said Feb. 8.

“We expect GDP growth in emerging Asia to stay strong in coming quarters,” said Kevin Grice, an economist at Capital Economics Ltd. in London. “The most trade-dependent economies will eventually see slower GDP growth later this year and in 2011 as the global upswing loses momentum. But Asia’s rebound will not come to a complete halt and growth, by some distance, will stay higher than in any other part of the world.”

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Latin America’s biggest economy created 181,419 jobs last month, led by manufacturers, compared with a loss of 101,748 jobs a year earlier, the Labor Ministry said in a report today in Rio de Janeiro.

Yields on interest rate future contracts due January 2011, the most traded on Sao Paulo’s BM&F exchange, rose 1 basis point, or 0.01 percentage point, to 10.25 percent. Traders bet the central bank will raise rates by at least a quarter point next month, according to Bloomberg estimates based on rate futures.

“This figure clearly reinforces the view that the economy is expanding at a strong pace,” Pedro Tuesta, senior economist for Latin America at 4Cast Inc., said in a phone interview from Washington. “It increases the odds that the central bank may start raising rates in March.”

According to the median forecast in a central bank survey of about 100 analysts published yesterday, faster economic growth, fueled by domestic demand, will prompt policy makers to raise the benchmark interest rate in April from a record low 8.75 percent for the first time since September 2008 to keep inflation in check.

“Brazil is on track to reach an all-time high in job creation in 2010,” Labor Minister Carlos Lupi told reporters. “If there is an interest rate increase this year, it will be very small,” Lupi said.

Brazilian companies will continue to hire more workers throughout the year, driven by forecasts that the country will post “strong” growth in 2010, Aurelio Bicalho, an economist at Itau Unibanco, Brazil’s biggest non-state bank, said in an e- mailed comment.

Gross domestic product will expand 5.8 percent this year, after growing 0.2 percent last year, according to central bank estimates.

The government-registered job creation number is a balance of posts created minus job dismissals. Registered jobs, or so- called formal work, assure employees a range of benefits such as unemployment insurance, bonuses and retirement payments by the government.

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And discerning whether that’s a smile on his face could be a clue to how the judge eventually rules.

Already, the case has been rife with humorous jabs from tiny Ladue-based South Butt LLC, which claims its clothing line is a protected parody of the popular North Face brand. In South Butt’s written response to the allegations in early January, attorney Al Watkins struck a jokey tone by including a photo of South Butt’s 18-year-old founder, Jimmy Winkelmann, and describing him — apparently for the judge’s benefit — as "a handsome cross between Mad Magazine’s Alfred E. Newman [sic] of ‘What Me Worry’ fame, and Skippy the Punk from the Midwest."

Watkins also noted how North Face’s decision to sue has resulted in a financial boon for his client. "But for the actions of North Face," he wrote, "the South Butt saga might have been relegated to local Friday fish-fry banter."

The question is whether Missouri Eastern District Judge Rodney W. Sippel finds any of this funny. An answer, of sorts, arrived Tuesday.

Sippel, 53, an appointee of President Bill Clinton, issued an order that opens with a quote from humorist Franklin P. Jones: "It’s a strange world of language in which skating on thin ice can get you into hot water." The judge then ruled against South Butt’s request that the lawsuit be dismissed. The judge also noted he did not find it "implausible" that South Butt’s logo could cause confusion or dilution of North Face’s trademark. So the case will go forward.

But at the end of his order, Sippel warned South Butt’s attorney against making requests with little merit — which also could be read as a warning to be more serious. "Although this filing may not reach the level of frivolity, it approaches the line," Sippel wrote.

That might sound like a rebuke.

But Watkins, South Butt’s attorney, did not see it that way.

"I’m very pleased that the judge has adopted a tenor and demeanor that is not inconsistent with that which we have employed in this case," Watkins told the Post-Dispatch on Wednesday no fax payday loans.

The South Butt was started in 2007 by Winkelmann as a way to spoof a status symbol that crowded the hallways of his former school, Chaminade College Prep. He began selling T-shirts, fleeces and shorts at Ladue Pharmacy, which handles the South Butt products’ marketing and manufacturing details. North Face sued Winkelmann and the pharmacy over the South Butt name in December.

South Butt has responded with humor over the dispute, both in its press releases and its legal filings.

Sandy Davidson, lawyer and professor of communications law at University of Missouri Columbia, said judges sometimes employ humor — and in a case like this, that could be good for South Butt.

Davidson pointed to the trademark case of Hormel, maker of Spam, suing over the puppet Spa’am, Miss Piggy’s guard in the "Muppet Treasure Island" movie. An appeals court sounded like it was having some fun when it shot down Hormel’s complaint.

"In a recent newspaper column," the court wrote, "it was noted that ‘In one little can, Spam contains the five major food groups: Snouts. Ears. Feet. Tails. Brains.’ … (One) might think Hormel would welcome the association with a genuine source of pork."

Davidson said she could see how Watkins might be "trying to invite the court to use banter that other courts have used."

Now, North Face and South Butt face court-ordered mediation in March, and, if that fails, will be back in Sippel’s courtroom.

But Watkins said the South Butt case was inherently humorous.

"No matter how much you try to suppress the levity of the issues," he said, "it is going to spontaneously emerge and spontaneously emerge often."

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Toyoda, the grandson of the company’s founder, made his first public appearance in the two weeks that the company has faced a growing crisis over the safety and quality of its vehicles.

The recall affected 8.1 million vehicles worldwide and will cost the company an estimated $2 billion in repair costs and lost sales due to a sticking accelerator. Toyota has not said how much the new problems with the braking system in the Prius will cost it, though.

Toyoda said an investigation of the Prius problems is under way, and a decision on whether there will be another recall will be announced as soon as possible.

The company also announced Friday it is looking at the brake systems of the latest Lexus hybrid vehicles as well as a Japanese model called the Sai — because they use the same system as the one on the 2010 Prius.

But Toyoda denied the company has been trying to hide problems with the brakes from safety officials in the United States and Japan. Still, he admitted Toyota needed to do more to assure customers about the safety of its vehicles.

"I feel we are in stormy weather," he said. "Under this situation, [we] must regain customer trust. Tackle the problem. My role is to carry it out. We lacked customer perspective. It’s very unfortunate."

Not going far enough. But one expert said Toyota and its chief made a mistake by not announcing a recall for the Prius, especially since it now is clear there is a problem that will eventually need to be fixed.

"What we heard this morning was more foot dragging," said Michelle Krebs, senior analyst for auto sales Web site Edmunds.com. "They still are not very forthcoming. I think it’d be in their best interest to do a recall, and get it all behind them."

Other experts agreed that Toyota is suffering greater damage by not getting all the bad news out as quickly as possible.

"For reasons we may never learn, Toyota appears to be pulling their bandage very slowly, and therefore keeping their recall situation…firmly in the public eye," said James Bell, executive market analyst for Kelley Blue Book.

Krebs said that while most Toyota customers appear to be staying loyal to the brand for now, the damage being done to its image could hit future sales. She believes Toyota’s estimates of a loss of 80,000 sales in North America and another 20,000 in Europe due to the recall are probably too low.

"My impression is they are fairly tone deaf about how significant this is in the U.S.," she said. "I don’t think they have a good sense of what it’s going to cost them in terms of reputation and sales."

She added that problems with the Prius are a particularly tough blow to Toyota — even though the number of hybrids affected is insignificant compared to the 8.1 million vehicles recalled due to the gas pedal concerns.

"The Prius is so important to them. It’s the pinnacle of their technological knowledge and engineering prowess. Now that image has been tarnished," she said.

Toyoda has faced harsh criticism over the last two weeks about his lack of public appearances during the crisis. Krebs said it was important for him to finally speak to the public.

The tone of the news conference, which took place late Friday night in Japan, was very out of character with what is normally seen at corporate press conferences in Japan. Reporters did not show the typical deference to a top executive. Some demanded answers about why there is no leadership and why the company was dodging questions.

Toyoda said the company would set up a committee to examine problems that led to the recall and said the company would cooperate with U.S. authorities who are looking into problems with Toyota vehicles.

"Believe me, Toyota’s cars are safe," he said.

No solution yet for brake problem. The company has admitted it had a problem with the software controlling the anti-lock braking system of the 2010 model year Prius. The company said earlier this week that it has changed the software for cars produced since January, and it is looking into what to do with the vehicles already on the road.

Jesse Toprak, analyst with TrueCar.com, said the delay in announcing a recall for the Prius is a sign that fixing vehicles already on the road won’t be as simple as fixing ones coming off the assembly line. But he said Toyota would be better off announcing the recall even if a solution is not finalized.

"Normally it would have been better off to wait for a solution. It doesn’t help your image to say you don’t know how to fix your own cars. But these are not normal times for Toyota," he said.

The 2010 model year Prius went on sale in the middle of last year. There are an estimated 37,000 of the cars on the road in the United States, and more than 200,000 worldwide. It is the best-selling vehicle in Japan and Toyota’s fourth-best selling model in the U.S.

There have been 124 reports of problems with the brakes on the Prius in the United States, according to the National Highway Transportation Safety Administration, which Thursday announced it had launched a formal defect investigation into the car. There have been reports of four accidents involving the Prius brakes, two of which had injuries, although there have been no reported fatalities.

Toyota, which achieved steady market share growth in the United States due to its reputation of strong vehicle quality and safety, has been criticized by U.S. Transportation Secretary Ray LaHood for being slow to respond to the latest problems. LaHood said Toyota did not move on the accelerator recall until pushed to do so by U.S. safety officials.

The Prius brake problem causes a delay of about a second in the brakes engaging, but during a second a car traveling 60 m.p.h. can travel almost 100 feet.

While Toyota (TM) has far greater financial resources than most of its rivals, especially its U.S. rivals General Motors, Ford Motor (F, Fortune 500) and Chrysler Group, the quality issues do pose a financial challenge for the company. Friday credit rating agency Standard & Poor’s placed its debt on credit watch, meaning it faces the risk of a downgrade that could raise its borrowing costs.

"Standard & Poor’s believes that these developments may affect the company’s reputation for quality, weakening its competitive position," it said in the announcement.

CNN’s Kyung Lah contributed to this report. 

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This would force the agency to support its government-guaranteed loans by charging higher fees on borrowers and lenders. That’s what occurred when Congress ended the subsidy for 7(a) loans – at President George W. Bush’s request – in 2004. Congress restored the subsidy this fiscal year, at a cost of $80 million.

The economic stimulus bill provided the SBA with an additional $375 million to waive fees for borrowers on most 7(a) loans and 504 loans, which mostly finance real estate, and increase the government guarantee on SBA loans from the typical 75 percent to 90 percent. Those enhancements made the loans more affordable for borrowers and less risky for lenders, enabling SBA lending to rebound after cratering during the financial crisis.

SBA loans are an important source of credit for small businesses that can’t obtain conventional loans.

In December, Congress came up with another $125 million to extend the fee reductions and higher loan guarantee until the end of February. Obama wants Congress to pass additional legislation extending them through Sept. 30, the end of the fiscal year.

The president’s budget proposal for next fiscal year, however, reveals that defaults on SBA loans have exploded over the past year, costing the government a projected $4.5 billion. Most of the problem loans were made between 2005 and 2007.

The administration proposes a $165 million subsidy for 7(a) loans next year, double this year’s subsidy if economic stimulus funds are excluded.

Beginning in 2012, however, Obama wants to give the SBA “the flexibility to adjust fees in the program to enable it to be self-sustaining over time,” according to the president’s budget plan. This would “strengthen the program’s long-term economic foundation,” the budget plan states.

Default rates for 7(a) loans aren’t much worse than the default rates for conventional loans, said Tony Wilkinson, president and CEO of the National Association of Government Guaranteed Lenders, which represents SBA lenders.

If the economy improves, default rates should fall, he said. A better business climate also could make an end to the government subsidy for 7(a) loans bearable, he said.

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OneUnited, which is based in downtown Boston but with major operations in Los Angeles, had $291.8 million in deposits at the end of 2009, according to a filing with the Federal Deposit Insurance Corp. That was down from $388.1 million at the end of 2008.

The bank’s net loans were $324 million at the end of 2009, down about 12 percent from the previous year. OneUnited has total assets of $540.6 million and primarily lends in city neighborhoods in Boston, Los Angeles and Miami.

The bank was not immediately available to comment for this story.

On the plus side, OneUnited turned in a full-year net profit of $3.17 million in 2009, compared with a year-ago net loss of $29.8 million when it had investment losses of nearly $60 million.

The past year has been a rough one for the bank after federal and Massachusetts bank regulators hit OneUnited with a cease and desist order. In December 2008, the regulators accused the management of OneUnited Bank of running an unsound lending operation and ordered a top-to-bottom review of executive perks that included a 2008 Porsche and a housing allowance for a beach-front home in California.

As directed by the FDIC, the bank has since sold the Porsche used by OneUnited Chief Executive Kevin Cohee.

The bank received more criticism after it received $12 million in federal bailout money, and had U.S. Rep. Barney Frank of Massachusetts, chairman of the powerful House Financial Services Committee, championing its cause. OneUnited needed the capital after investments in a poorly diversified portfolio were wiped out, leaving the bank with no capital in the third quarter of 2008.

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