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The yen bounced back to day highs after the central bank expanded a scheme supplying cheap fixed-rate loans to banks, a move seen by investors as a symbolic gesture that will do little to halt the currencys climb that hurts exports and may prolong deflation.

"Todays move is not a bold move," said Simon Wong, regional economist at Standard Chartered Bank in Hong Kong. "If the yen continues to appreciate, say it appreciates beyond the 80 level, that could trigger more direct intervention at some point. We cannot rule out a direct intervention at this point."

The decision follows weeks of efforts by Tokyos policymakers to talk down the yen, signaling the possibility of intervening in the market after the Japanese currency hit a 15-year high of 83.58 yen against the dollar last week. The government had also heightened pressure on the BOJ to do its part.

The central bank said that by increasing the volume and duration of funds made available to banks it aimed to lower money market interest rates -- something that in the past also helped ease the upward pressure on the yen.

Although Japanese nominal interest rates are at rock bottom, deflation has boosted real rates, deterring investment and driving up the yen as overseas investors seek real yields that are higher than those in other major economies.

PM KAN KEEN TO LOOK ACTIVE

The yens rebound pulled the Nikkei share average off its peaks and helped Japanese government bond futures bounce back from an early plunge.

Prime Minister Naoto Kan, whose Democratic Party swept to power a year ago but was thrashed in a July upper house poll, is keen to show that he is doing something about the economy ahead of a challenge from powerbroker Ichiro Ozawa in a September 14 party leadership vote that could split the party.

Kan was to meet BOJ Governor Masaaki Shirakawa after the policy board meeting, and cabinet ministers were to decide the basic thrust of additional measures to help the slowing economy at a meeting later in the day.

"The governments fiscal policy and the BOJs monetary policy should be in sync to send a strong message," Trade Minister Masayuki Naoshima told reporters.

But Japans huge public debt, now twice the size of the economy, limits Tokyos options, and the government is expected to propose shifting funds around rather than announce new substantial spending.

Governor Shirakawa will hold a news conference at 2:30 p.m. 0530 GMT, the BOJ said.

FLYING SOLO?

Japan will likely need to intervene alone if it were to step in to curb yen gains, as its Group of Seven counterparts, happy with the benefits to exports from their weak currencies, are in no mood for coordinated intervention.

Solo currency intervention, however, will not have much effect in weakening the yen unless joined by aggressive monetary easing by the BOJ, traders say.

In Mondays move, the central bank increased the volume of money available to banks under its fixed-rate fund supply operation to 30 trillion yen $351 billion from 20 trillion yen.

It also put in place a six-month fund operation in addition to the three-month loan programme already in place.

Of the 30 trillion yen, 10 trillion yen will be the six-month fund operation, BOJ said. The decision was by an 8-1 vote, with board member Miyako Suda dissenting.

The central bank, as widely expected, maintained its overnight core rate target at 0.1 percent by a unanimous vote.

The BOJ launched the funding scheme, which offers loans at 0.1 percent, in December. That failed to boost bank lending but helped to push the yen further away from a November high.

The BOJ last eased monetary policy in March, when it doubled the size of the fixed-rate fund supply tool to 20 trillion yen.

$1=85.37 Yen

Writing by Leika Kihara and Linda Sieg; additional reporting by Tetsushi Kajimoto; Editing by Edmund Klamann and Tomasz Janowski

The National Association for Business Economics said on Monday that 60 percent of 242 members surveyed from July 30-Aug 10 said monetary policy was "appropriate" for the conditions the economy currently faces.

The Fed kept benchmark overnight interest rates steady in a zero to 0.25 percentage point range at its last policy meeting on August 10 and renewed a pledge to keep them low for an extended period.

Some 67 percent felt the Feds decision at the August 10 meeting to use cash from maturing mortgage bonds it holds to buy more government debt was helpful in the face of a weakening economy. That move keeps the Feds balance sheet from running down,

In the near term, 45 percent of respondents believed monetary policy risks now were tilted toward deflation, or falling prices, in the short run but toward inflation in the longer term.

The Fed has sought to keep ample liquidity in the financial system in a bid to spur lending, but some analysts say it may be difficult to remove that liquidity quickly enough in the future to ward off the risk of an inflationary price spiral.

"Roughly half feel the Fed will start tightening too late, and a similar share think the recently passed financial regulation bill will modestly reduce the risk of another global financial crisis," the survey said.

There seemed to be considerable skepticism among the economists on other matters.

Fully 89 percent thought the recently passed sweeping overhaul of the financial regulatory system would have only modest effect in avoiding another crisis, and only 3 percent said it would significantly cut future risk.

The economists generally opposed letting tax cuts put in place in 2003 by the former Bush administration expire on schedule at year-end and doubted that a group established to find ways to shrink deficits will produce anything of value.

"A resounding 81 percent think the bipartisan National Commission on Fiscal Responsibility and Reform will be unable to produce a credible plan capable of garnering congressional support," the survey found.

The commission is to identify policies that would be effective in shrinking the huge shortfall between the governments income and its spending and to produce a report with recommendations by December 1.

Reporting by Glenn Somerville; Editing by Leslie Adler

Sanofi said it is considering all options to complete the transaction, hinting it would consider a hostile takeover bid.

The so-called "bear hug" letter aims to pressure Genzyme to respond to the offer or justify to its shareholders why it has not held negotiations.

"It is our preference to work together with you and the Genzyme board to reach a mutually agreeable transaction," Sanofi Chief Executive Chris Viehbacher wrote to his counterpart at Genzyme, Henri Termeer.

"Your continued refusal to enter into constructive discussions will serve only to further delay the ability of your shareholders to receive the substantial value represented by our all-cash offer," the letter said.

Genzyme was not immediately available for comment.

FIRST SALVO

"Im pleased to see theyre being disciplined in price," said Marc Booty, a fund manager at Pictet. "This is a very interesting first salvo."

"Its a clever strategy. They werent getting anywhere in negotiations and now theyre trying to flush out other buyers and information from Genzyme to justify if a higher price is required," Booty said.

Sanofi has stopped short of making a direct approach to Genzyme shareholders and sources familiar with the matter have said it is not keen to do so. But analysts and traders said its move on Sunday takes the company one step closer to a hostile bid.

"This signals that they are willing to play hardball and could go hostile. The fact that they are standing pat with their offer is a sign they arent going to be swayed from their course," said an arbitrageur, who declined to be named because he was not authorized to speak to the media.

"Thats not a positive for Genzyme holders, who have been hoping for a higher premium," said the trader, who specializes in takeover stocks.

Shares in Genzyme closed at $67.62 on Friday, having jumped from around $54 before news of Sanofis interest surfaced.

Sources previously told Reuters that Genzyme wants an offer of at least $75 per share before Sanofi could review its private financial records. Some shareholders want as much as $80 a share to clinch a deal.

However, Sanofis top two shareholders -- cosmetics group LOreal and oil company Total SA -- worry that the company might pay too much for Genzyme and are not convinced it is the best fit, bankers said last week.

News of Sanofis initial approach to Genzyme emerged late in July and the French drugmaker sent a written expression of interest on July 29.

Sanofi said that Genzyme rebuffed the offer on August 11, but after some persuasion, agreed to a meeting of financial advisers on August 24.

"We had one phone call in general terms and Genzyme immediately called a board meeting and said they werent for sale without me even saying the price," Viehbacher said on a conference call.

When asked about how Sanofi will proceed, Viehbacher said: "There is no reason to be discussing the next step when we are at this step now ... No reason to be discussing another price."

HOSTILE BID OPTION

Analysts have said they expect a deal to be finalized in the range of $74 to $77 a share. If Sanofi walks away, analysts see shares of Genzyme falling to the low $50-range. Some say it could take at least a year for them to rebuild the lost value.

"Of course Sanofi will go hostile if management doesnt accept the offer," said Karl Heinz Koch, an analyst at Helvea in Zurich.

"I think this is a great offer. What do you do as a shareholder if the stocks at $52.50 and you can sell at $69? You get rid of your shares. I dont think Sanofi will have to raise their offer much," Koch said.

Sanofi said it had taken into account an "anticipated recovery in Genzymes performance in 2011," as the biotech company tries to rectify manufacturing problems that led to shortages of two of its top drugs -- Cerezyme, its drug to treat Gaucher disease, and Fabrazyme, its drug for Fabry disease -- and hit its stock price over the past year.

Genzyme is the worlds dominant supplier of drugs to treat Gaucher and Fabry disease, which are rare, inherited disorders in which patients lack, or are deficient in, key enzymes for breaking down fats.

Sanofi said it believes it could help Genzyme fix its manufacturing problems "quickly and successfully" and perhaps accelerate the process with the expertise of the combined company.

Last year Genzyme was forced to temporarily close its manufacturing plant in Boston because of a viral contamination, leading to shortages of Cerezyme and Fabrazyme. Genzyme has said it could take up to four years to resolve the problems.

"I understand management doesnt want to sell below value, that they want to stage a recovery first before starting negotiations," Koch said.

Sanofi said its offer represents almost a 31 percent premium over Genzymes stock price before press speculation that a bid had been made. Based on analyst consensus estimates, the offer represents a multiple of 36 times Genzymes 2010 earnings per share and 20 times 2011 earnings per share, Sanofi said.

"The big question is exactly what the difficulties are with the manufacturing problems at Genzyme and to assess that Sanofi needs to see the books," said Mike Ward, an industry analyst at Ambrian Partners in London.

"I suspect they will go a little bit higher -- the mid-$70s should probably do it," Ward said.

Sanofi said it had financing for the offer from BNP Paribas and JP Morgan and that it has not talked to Genzyme activist shareholders. Shareholders Relational Investors and Carl Icahn hold 3.8 percent and 4.9 percent of Genzyme, respectively.

Relational and Icahn could not be immediately reached for comment.

BHP Billiton is chasing Potash Corp to become the worlds largest potash supplier, with nearly one-fourth of the global market. Potash Corp formally rejected the offer last week and BHP now has to woo the Canadian companys shareholders.

"BHP said that 70 percent of the value is in the potash assets and that over time it would probably look to possibly divest the nitrogen and perhaps the phosphates business," Soleil Securities analyst Mark Gulley said in a note to clients after a conference call last week.

The conference call was led by BHPs chief commercial officer, Alberto Calderon, who is also head of mergers and acquisitions.

With its takeover offer -- the largest in any industry this year -- BHP aims to vault to the top of a rebounding fertilizer industry, as the economies and populations of Asian powerhouses like China and India rapidly expand, lifting demand for crop nutrients.

BHP has lined up $45 billion in debt for the bid, and Chief Executive Marius Kloppers has said it does not need to sell any assets to help fund the deal.

Analysts estimate Potash Corps phosphates business is worth around $7 billion and its nitrogen business is worth abut $5 billion, each ranked third or fourth in their industries.

Kloppers and Calderon are in North America this week to brief BHP shareholders, many of whom are also Potash Corp stakeholders, on the bid and the groups half-year results, its richest in two years.

BHP has played down the chances of raising its offer, saying it timed its bid to ensure that potential rivals, like Rio Tinto and Brazils Vale, were not in a position to raise the stakes.

"There is only one offer on the table, so why would we compete against ourselves?" Chief Financial Officer Alex Vanselow said in an interview on Australian television on Sunday.

Potash Corp shares closed on Friday at $147.73, 14 percent above BHPs offer, indicating investors expect BHP to raise its offer or another bidder to enter the fray.

The current bid is not subject to a vote of BHPs shareholders. But under UK listing rules, if it sweetens the offer to be worth at least 25 percent of BHPs market value at the time, then it would need its own shareholders approval.

Reporting by Ed Davies and Sonali Paul; Editing by Balazs Koranyi

If the agreements are not in place before midnight on Wednesday, millions of homes in major cities like New York and Los Angeles could see their local ABC broadcast, ESPN channels and some Disney channels go dark.

Both sides said in a statement early on Sunday they had made "significant progress" in their negotiations, but a deal is yet to be inked.

The progress was in part an agreement to cool off on a barrage of hard-hitting adverts such as Disney warning customers to switch to satellite operators DirecTV and DISH Network or phone company Verizon Communications -- which has also ran a separate campaign.

While programing fee negotiations are always about how much the cable operator might have to pay to keep carrying the programmers networks, these latest talks between Time Warner Cable and Disney have been further complicated by issues such as competition from online video services like Apple TV and Netflix Inc and retransmission cash fees for the ABC network.

With reports last week that Disney is in advanced talks with Apple Inc to make some of its current shows available for a rental fee of 99 cents, Time Warner Cable executives believe they should be offered comparable deals or even for free through its video-on-demand service, said the person familiar with the discussions.

Time Warner Cable has also balked at Disneys request to pay a fee for ESPN3.com, a sports website which carries some live events online but is only available to the broadband customers of its cable operator partners.

Bloomberg reported last week that Disney was looking for around 10 cents a customer each month. Time Warner Cable has 9.2 million broadband customers. ESPN3, which carried some World Cup matches earlier this summer, already has a deal in place with larger cable company Comcast Corp.

Time Warner Cable has negotiated an online programing deal before with Fox for its Speed2 channel online as part of the latest round of negotiations in December.

The discussions over retransmission fee for ABC is less at the forefront compared with previous battles with News Corps Fox. Cable operators have become more accepting of the principle of paying to carry free-to-air broadcast signals on their cable systems.

If the talks fail it will hit Time Warner Cable homes that carry ABC in New York, Los Angeles, Raleigh, North Carolina, Houston and Toledo, Ohio. It would also hit six ESPN networks, ABC Family, Disney Channel, Disney XD and SOAPnet.

An outage would also affect homes served by closely held Bright House Networks which serves Tampa and Orlando, Florida, as well as several other smaller metropolitan areas.

Time Warner Cable negotiates some programing deals on behalf of the much smaller Bright House.

Both Disney and Time Warner Cable say privately they expect the negotiations to go to the wire as they often do, with a possibility of a last-minute deal or at least an extension in order to avoid disrupting customers viewing.

But channels have gone dark before in recent programing fee disputes.

Earlier this year, ABC went off the air for several hours on Cablevision Systems Corp only to return 12 minutes into the live Academy Awards ceremony telecast after an agreement was reached.

Both Time Warner Cable and Disney will be keen to avoid the public relations and consumer backlash that could come with a programing blackout hitting many more millions of homes than with Cablevision.

"We are committed to reaching a fair agreement so Time Warner Cable subscribers can continue to enjoy our wide array of services," said Charissa Gilmore, spokeswoman for Disney-ABC Television Group.

The Fremont-California based 3PAR had also notified Dell Inc of its intention of terminating its merger agreement. Dell has three business days to match HPs offer under its merger agreement with 3PAR.

"We will make a decision in the best interest of our customers and shareholders and make that known when it becomes appropriate," said Dell spokesperson David Frink.

A HP spokesperson decline to comment.

The move is the latest volley in an intense bidding war between technology giants HP and Dell for the high end data storage company 3PAR.

On Aug 27, HP raised its bid to $30 per share, or $2 billion, less than 3 hours after Dell announced 3PAR had accepted its bid of $27 per share, which matched HPs previous offer.

"We have an existing agreement with 3PAR that gives us the right to match any competitive offer. We are assessing it at this time," Frink added.

The bidding war, a rare occurrence in the tech sector, started last week when HP bid $24 a share for 3PAR, topping Dells previous $18-per-share deal.

The pursuit of 3PAR comes as HP and Dell, as well as other large technology vendors from International Business Machines Corp to Cisco Systems Inc, are trying to expand into new business areas.

3PAR specializes in high-end data storage, a key part of "cloud computing" -- an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to save costs.

The company competes with EMC Corp, NetApp Inc, IBM and other data storage companies, and 3PARs expertise on the high end has made it particularly attractive.

In the last notable bidding war in the tech industry, EMC outbid NetApp last year to buy Data Domain for $2.4 billion. Data Domain was advised in that deal by Frank Quattrone, the same veteran technology banker who is advising 3PAR in the latest negotiations.

Reporting by Jennifer Saba; Editing by Diane Craft

August U.S. payrolls and other data this week will provide critical evidence on whether the U.S. economy is slipping into a coma of barely perceptible growth, as some economists fear.

"Our view is that the recovery is petering out, not sliding into a double dip," said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina. "In our mind, the employment situation likely deteriorated in August."

After a recent bump up in jobless benefits claims, weak housing data and the Federal Reserve pledging to step up asset purchases if necessary, the headline numbers in Fridays payrolls are likely to add to a gloomy prognosis.

Economists polled by Reuters forecast an August drop of 99,000 non-farm jobs after a fall of 131,000 in July. The unemployment rate is expected to tick higher, to 9.6 percent from 9.5 percent.

The main culprit for the drop is the continued layoff of temporary government census workers. But if private-sector employment maintained growth and both working hours and hourly income also made gains, there would be reason for optimism that consumers have some capacity to spend money.

"If companies are asking workers to put in more hours, that is a good sign that they will have to start hiring soon," said Bernard Baumohl, head of The Economic Outlook Group in Princeton Junction, New Jersey.

The Reuters poll forecasts a 0.1 percent gain in average earnings and a slight gain in weekly hours. Private payrolls are expected to rise by 42,000 after a 71,000 rise in July.

There are wide variations in the data. Vitner predicts a fall of 20,000 private-sector jobs in August, while Baumohl argues that fundamentals are better with an 80,000 rise. But even in the latter case, the growth will still likely be too weak to overcome gloom in markets and among business leaders.

INDUSTRIAL DEMAND

Institute for Supply Management data on Wednesday will also show whether the slowdown has spread to the manufacturing sector. A key metric will be whether the new orders index falls below 50 in August after a drop in durable goods orders in July.

Many economists have been hoping that the factory sector would provide enough lift to offset the weak consumer and housing sectors.

But U.S. economic growth in the second quarter was marked down to 1.6 percent on Friday, prompting economists to ratchet back forecasts to around 1.7 percent for third quarter growth from 2.4 percent just two weeks ago.

Societe Generale credit analyst Aneta Markowska said too much of U.S. consumer demand was flowing to overseas producers to create sustainable job growth at home.

"The hope was that the inventory cycle would induce enough manufacturing job growth to jump-start private demand and grease the wheels of the recovery cycle, but that process has failed to catch on," she wrote in a research report.

Auto sales data on Wednesday will provide another measure of consumer demand. Analysts are forecasting a rate roughly flat with Julys, at 11.5 million units -- well below the year-ago rate, which was fueled by "cash for clunkers" tax credits. Forecasts for the second half and next year may be cut.

CENTRAL BANK MONEY FLOOD

The data should help the Federal Reserve decide whether to increase its quantitative easing program, under which it is reinvesting the proceeds from maturing mortgage debt into longer-term Treasury debt in an effort to push borrowing rates down further.

At the central bankers conference in Jackson Hole, Wyoming, Fed Chairman Ben Bernanke pledged that the Fed would increase asset purchases if needed, but he declined to say what would trigger bolder action.

Also on Wednesday, the Fed will release minutes of its August policy meeting, which may shed light on the central banks options to increase quantitative easing and on the divisions it has caused between policymakers.

The European Central Bank also meets next week and is likely to extend its unlimited liquidity provisions, which had been due to start expiring in September. It aims to keep flooding money markets with cash to ease financial troubles in southern Europe.

Meanwhile, the ECB is likely to upgrade forecasts for overall European growth on a faster-than expected German recovery that is causing industrial workers there to demand higher wages

Axel Weber, an ECB governing council member who also heads Germanys Bundesbank, told CNBC in Jackson Hole that Europe was on the brink of a "self-sustaining recovery." Germanys unemployment rate will be around 7 percent and will continue to fall, he said.

Japans central bank also will be in focus next week over the possibility of unilateral intervention to curb the yens rise.

Prime Minister Naoto Kan, who promised "firm measures" on currencies if needed, plans to outline new measures to support the economy and deal with the yen on August 31. First, he will confer with Bank of Japan Governor Masaaki Shirakawa, who attended the central bankers conference in Jackson Hole.

A "jawbone" campaign by Japanese officials raising the specter of intervention over the past week has pulled the yen back from a 15-year high of 83.57 against the dollar. A continued rise threatens to derail an export-led recovery for Japan.

Reporting by David Lawder; Editing by Dan Grebler

Getting that buy-in may eventually make it easier for Bernanke to rally the Fed to move more aggressively if it is clear that the recovery is stalling.

"The data is likely to do the work convincing more timid members" of the Feds policy-setting committee, BNP Paribas economist Julia Coronado wrote in a note to clients.

Speaking on Friday at the Feds annual conference in this mountain resort, Bernanke gave a detailed reading of the wilting economic outlook and a reminder of the weapons the Fed could use to bolster the recovery from the worst U.S. recession since World War Two.

It was a much more nuanced assessment than the statement released by the U.S. central bank on August 10 when it shifted policy by taking new measures to support the economy.

The Feds move nearly three weeks ago to resume buying longer-term Treasury securities to hold its balance sheet steady, instead of allowing them to continue running off, was a controversial one within the banks inner sanctum.

Some members of the policy-setting Federal Open Market Committee saw the change as sending a signal to markets that the Fed was closer to major new monetary easing than it was.

Some Fed officials question whether recent weakness in the U.S. economy is not merely a soft patch in a recovery that will eventually gather momentum rather than an early warning sign that growth will be too sluggish to support new job creation.

Critics of the move on the Feds policy-setting panel are wary of further bloating a balance sheet that at $2.3 trillion is more than twice its pre-crisis levels, just to bring down unemployment by an incremental amount.

To the critics, the Fed sent a wrong signal on August 10 when it said it would resume buying Treasury bonds "to support the recovery."

Bernankes speech has given some solace to the skeptics.

While acknowledging the slowdown, Bernanke said the preconditions for a pickup in growth in 2011 appear to remain in place.

"The chairman did not brace the nation for a double-dip" recession, said Credit Suisse economist Dana Saporta.

Bernanke was also at pains to weigh the risks and benefits of any new Fed action, acknowledging that the exact impact of buying more Treasury debt is unknown, just as cutting the already minimal interest rate the Fed pays banks to park their cash at the central bank might help only a little.

"We took Bernankes comments as consistent with our own view that there is a higher bar for further stimulus than seemed the case following the decision to maintain the size of the balance sheet at the August FOMC meeting," Barclays Capital economist Peter Newland said.

In addition, Bernanke spelled out that one of the factors that would guide the Fed would be a further fall in already low levels of inflation, raising the risk of deflation.

"It is worthwhile to note that, if deflation risks were to increase, the benefit-cost trade-offs of some of our policy tools could become significantly more favorable," he said.

To some economists, however, the pace of the U.S. recovery has already slipped into a lower gear, and Bernankes speech portends further Fed action in the next few months.

"The overall tone was one of watch and wait, despite ongoing signs that U.S. economic activity has not only dropped below its potential growth rate but has a significant probability of weakening further," Goldman Sachs economist Jan Hatzius wrote in a research note.

By framing the conditions for any new move to head off the risk of a relapse into recession, Bernanke has likely made it easier to bring the full Fed along with him.

Genzyme shareholders would receive $69 per Genzyme share in cash, representing a 38 percent premium over Genzymes share price of $49.86 on July 1, Sanofi said in a statement.

Based on analyst consensus estimates, the offer represents a multiple of 36 times Genzymes 2010 earnings per share and 20 times 2011 earnings per share, Sanofi added.

"Accordingly, the offer price takes into account the upside potential of the anticipated recovery in Genzymes performance in 2011," Sanofi said in the statement, adding that it had already secured financing for its offer.

Sanofi submitted the offer in a letter to Genzyme after several unsuccessful attempts to engage Genzymes management in discussions, the French group said.

"We remain focused on entering into constructive discussions with Genzyme in order to complete this transaction," Sanofi Chief Executive Chris Viehbacher said in the statement.

Sanofi-aventis added that it was prepared to consider all alternatives to successfully complete this transaction.

Reporting by James Regan; Editing by David Cowell