(Reuters) - President Barack Obama on Monday nominated Tom Perez, head of the Justice Department's Civil Rights Division, as labor secretary, a Cabinet member who will play a key role in the administration's efforts to raise the minimum wage and reform immigration laws.Perez is the only Latino nominated to Obama's second-term Cabinet so far. The Harvard-educated civil rights attorney is expected to face opposition from some Republican senators who say he has been too aggressive on certain immigration issues, and too political.
Obama urged the Senate to quickly confirm Perez, who he said would be an integral part of his economic team.
Perez, the son of immigrants from the Dominican Republic, helped pay for college by working as a garbage collector and in a warehouse, said Obama, who described Perez's career as exemplifying the American success story.
"If you're willing to work hard, it doesn't matter who you are, where you come from, what your last name is - you can make it if you try," Obama said. "Tom's made protecting that promise for everybody the cause of his life."
Perez's nomination was championed by Hispanic groups, which have pushed for more representation in the Cabinet.
Perez made brief remarks in Spanish and English at the event, which was attended by top union leader Richard Trumka of the AFL-CIO labor federation and Benjamin Todd Jealous, head of the NAACP, the nation's largest civil rights group, among others.
Perez said he looked forward to meeting with senators from both parties.
But Perez is expected to face tough scrutiny from Republicans like Senator Jeff Sessions of Alabama, who called Perez "the wrong man for this job" and criticized him for being too aggressive helping undocumented immigrants find work as part of an advocacy group called Casa de Maryland.
"His views on illegal immigration are far outside the mainstream," Sessions said in a statement.
Senator Chuck Grassley of Iowa, the top Republican on the Senate Judiciary Committee, has also expressed concerns.
But Democratic Senator Patrick Leahy, head of the Judiciary Committee, called Perez a "fierce defender of workers' rights" who is "uniquely suited" for the job and should be confirmed.
(Additional reporting by Jeff Mason, Mark Felsenthal and Thomas Ferraro; Editing by Eric Beech)
China criticizes U.S. anti-missile North Korea plan
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(Reuters) - China said on Monday U.S. plans to bolster missile defenses in response to provocations by North Korea would only intensify antagonism, and urged Washington to act prudently.
"The anti-missile issue has a direct bearing on global and regional balance and stability. It also concerns mutual strategic interests between countries," Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing.
U.S. Defense Secretary Chuck Hagel announced plans on Friday to bolster U.S. missile defenses in response to "irresponsible and reckless provocations" by North Korea, which has threatened a preemptive nuclear strike against the United States.
Hong said China believed efforts to increase security and resolve the problem of nuclear proliferation were best achieved through diplomatic means.
"Actions such as strengthening anti-missile (defenses) will intensify antagonism and will not be beneficial to finding a solution for the problem," Hong said.
"China hopes the relevant country will proceed on the basis of peace and stability, adopt a responsible attitude and act prudently."
The Pentagon said the United States had informed China, North Korea's neighbor and closest ally, of its decision to add more interceptors but declined to characterize Beijing's reaction.
The remarks from China's Foreign Ministry come days before U.S. Under Secretary for Terrorism and Financial Intelligence David Cohen visits China to discuss implementation of economic sanctions against North Korea.
China has expressed unease at previous U.S. plans for missile defense systems, as well as sales of such systems to Taiwan and Japan, viewing it as part of an attempt to "encircle" and contain China despite U.S. efforts to ease Chinese fears.
China has responded by developing an anti-missile system of its own, announcing the latest successful test in January.
(Reporting by Sui-Lee Wee; Writing by Ben Blanchard; Editing by Robert Birsel)
Cyprus starts to lose its appeal for wealthy Russians
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(Reuters) - Russians responded angrily on Monday to the threat of a levy on bank deposits in Cyprus that could end the Mediterranean island's appeal as a safe haven for their money and cost them billions of euros.
Russians have stashed away huge sums in Cyprus since the Soviet Union collapsed in 1991, making the most of low taxes and light regulation to keep their money safe and, in some cases, to launder it.
But Russian banks, companies and individuals will be hit hard if Cyprus imposes the one-off levy on bank deposits as part of a European Union bailout, and some started withdrawing their money even before the weekend deal was agreed.
"Corporate clients have been calling and emailing asking what is happening and they are quite concerned to say the least, because they need to know what to do," said Thomas Keane, co-founder of Cyprus-based law firm Keane Vgenopoulou & Associates LLC, which has Russian corporations amongst its clients. "They are considering discussing looking at other jurisdictions."
Keane said that in the past ten days since rumors surfaced about such a move, Russian depositors had taken around 2 billion euros ($2.6 billion) out of Cyprus.
A Moscow-based adviser said: "People will start looking at London, Zurich, maybe the Far East, Switzerland."
Cypriot ministers were trying on Monday to revise the plan to seize money from bank deposits, which could amount to 9.9 percent on accounts holding more than 100,000 euros, but the damage has already been done in Russia.
Michael Pugh, partner at law firm Hogan Lovells in Moscow said he expected the move to provoke turmoil in the markets and could lead to people withdrawing their deposits, which in turn may destabilize Cyprus further.
ORTHODOX LINKS
President Vladimir Putin said the move was "unfair, unprofessional and dangerous" and Russians with money in Cyprus said they had lost confidence in the banking system of a country with which they share Orthodox Christian links.
"When I heard about it, my first thought of course was 'Oh God, I have money there.' And I got scared. Really scared," said a panicky customer who declined to give her name outside a branch of Uniastrum Bank in Moscow.
She poured scorn on an official statement by the bank that client deposits were secure.
Uniastrum, a bank best known for providing payments services, is controlled by Bank of Cyprus, in which Russian billionaire Dmitry Rybolovlev owns a minority stake.
There is no official sum available in Russia or Cyprus for the amount Russian banks, firms and individuals hold in Cyprus. But of almost 70 billion euros in deposits held there, a little less than half is held by non-residents and most are believed to be Russian.
One Russian bank, Alfa Bank, estimates that $70 billion of illegal capital flight from Russia in the past two decades may have found its way to Cyprus.
Moody's rating agency said last week Russian banks had about $12 billion placed with Cypriot banks at the end of 2012 and has estimated that Russian corporate deposits at Cypriot banks could be around $19 billion.
"We think that the $19 billion exposure is mostly wholesale - ie corporate," Eugene Tarzimanov, Senior Credit Officer at Moody's in Russia, told Reuters.
Some of Russia's largest banks have some credit exposure to Cyprus. VTB, Russia's second-largest bank by assets, had $13.8 billion in assets and $374 million through its Cypriot subsidiary, Russian Commercial Bank, at the end of 2011.
BANK SHARES
Shares in Russia's top lenders Sberbank and VTB both fell more than 3 percent in trading in Moscow.
VTB has said it is closely watching the situation and that it will evaluate the consequences after studying the law's text. Sberbank said it does not have its own funds in Cyprus and does not disclose information about customer accounts.
Although Putin criticized the levy, he has called for moves to clamp down on the capital flight - particularly as illegal transfers abroad deprived state coffers of almost $50 billion in 2012, central bank chief Sergei Ignatyev said.
"There is definitively a positive from the point of view of the government - in that the conditions of holding money in Cyprus are becoming tougher and less profitable," said Nikita Petrov, a professor at the Higher School of Economics in Moscow.
"This fits in with the idea of 'de-offshoring' which Putin has been calling for."
Ivan Tchakarov, Chief Economist, Russia & CIS at Renaissance Capital, said the moves were "obviously manageable from a macro perspective but will be very painful for individual depositors."
"Russians can ask a fair question - we have a deep relationship with Cyprus and have been helping them with loans ... In terms of the Russian reaction - they are not happy," he said.
As part of a package of support for Cyprus, EU officials expect Russia to extend an existing 2.5 billion euro loan by five years, until 2021, and reduce the interest rate.
But Finance Minister Anton Siluanov said a failure to coordinate with Russia on the bailout could affect Moscow's decision on the restructuring.
(Additional reporting by Katya Golubkova, Oksana Kobzeva and Maya Dyakina; Writing by Timothy Heritage; Editing by Giles Elgood)
Designers at Japan Fashion Week target growing Asian market
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(Reuters) - From a phoenix-themed collection by a Japanese designer who has clothed Lady Gaga to touches of traditional Mongolian decorations, designers showing at Japan Fashion Week set their sights firmly on Asia and its huge market.
Chinese consumers have become the world's leading buyers of luxury goods and account for one quarter of this market globally with demand growing, according to a report by consulting firm Bain & Co.
The fashion extravaganza showcasing the autumn and winter collections of 2013/14 kicked off at the weekend but Japanese brands took to the stage on Monday with Masanori Morikawa and his self-directed label, "Christian Dada".
Morikawa has created several pieces for American pop star Lady Gaga including a pink dress reminiscent of an origami crane for her 2012 "Born This Way Ball" tour.
This time he turned to Asia for inspiration with an edgy, androgynous collection titled "Fenghuang," which is Chinese for the mythical bird phoenix, pairing long, loose pants with richly embroidered lace on shirt sleeves for men and women.
Leather pants and jackets mingled with down-paneled trousers and shirts in plain, solid colors of black, white, red, blue and gold, which Morikawa said represented the nature of the phoenix.
"There's also the idea that the phoenix contains within itself both the male and the female, so we took this concept of fusion for the collection," Morikawa told reporters.
Asian influences came to the fore on Sunday as well as Mongolian designer Ariunaa Surenjav mixed modern designs with traditional raised forms on the shoulders and bunched sleeves.
"That part of the clothing design where the material goes up on the shoulder ... comes from the tradition in old Mongolia, where the local people who were noble and respected had that design," said Surenjav.
A NOD TO CHINA?
Although Morikawa said taking a Chinese title for the collection was just a reference to Chinese mythology and not a nod to the huge potential Chinese market, other designers were more open about their goals.
Conny Groenewegen, a Dutch designer who led off the runway on Sunday with clothing heavily influenced by Japanese designers, said her ambitions in Asia do not end with Japan.
"I would be very much interested to visit Shanghai and present my work over there, because I think that it is moving very fast," she told Reuters. "It's like a big youth culture over there and it has also a big, very rich history."
Although growth in China slowed last year, Bain is still forecasting growth of 4-6 percent a year for the global luxury market through 2015, after growth of 10 percent in 2012 to about $280 billion, largely driven by Chinese consumers.
With 1.3 billion consumers, many with a strong inclination for expensive brands that scream status, China remains a driving force in the luxury market.
Japan Fashion Week continues until March 24 with names such as Vivienne Tam and Hiroko Koshino also taking part.
(Additional reporting by Mariko Lochridge, Editing by Belinda Goldsmith)
Exclusive: Brazil likely won't have new jets for World Cup
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(Reuters) - Brazilian President Dilma Rousseff has again delayed choosing a provider for 36 new Air Force jets, meaning the country likely won't have any next-generation fighters available for security when it hosts the World Cup soccer tournament next year.
The Air Force sent embassies representing the three companies that are finalists for the $4 billion-plus deal a letter this week requesting they renew their applications, which formally expire on March 30.
The request extends the tender period by up to another six months, the Air Force said in an statement emailed to Reuters on Friday. The finalists are Boeing Co.'s F/A-18 Super Hornet, Dassault Aviation SA's Rafale, and Saab AB's Gripen.
The extension effectively ended the companies' hopes that Rousseff might announce her decision this month. The companies may now need to recalculate critical pieces of their offer, such as price.
Rousseff has been hesitant to make a decision on the jets, citing concerns over the hefty price tag at a time when Brazil's economy is stuck in a two-year slump.
The tender, one of the biggest such defense contracts in the emerging-market world and a critical piece of Brazil's strategic alliances for years to come, has been postponed by three different Brazilian governments over the past decade.
However, this latest delay could pose new problems.
Sources with knowledge of the tender process told Reuters that, because of the time needed to negotiate a deal and then manufacture the jets, it is now logistically impossible for new aircraft to be delivered before Brazil hosts the World Cup, starting in June 2014.
Meanwhile, the country's current fleet of Mirage fighters - which the new jets are meant to replace - is so old that the Air Force planned to ground them at the end of this year.
Asked about the delay on choosing the new jet, a defense ministry spokesperson said, "The matter is in the president's hands and she will decide at the appropriate time."
Whether Brazil actually needs the jets for security at the World Cup is a subject of debate.
Brazil has no real enemies, and has not been a target of terrorism in recent years. In 2010, then-Defense Minister Nelson Jobim dismissed any link between the procurement of the jets and the upcoming sporting event, declaring, "From what I know, planes don't play soccer."
However, at least one other recent World Cup host felt differently.
When South Africa hosted the tournament in 2010, Saab's Gripen jets were a fixture in the skies overhead, logging a total of 259 hours in patrols during the event, according to the company's official blog. Saab said the Cup was the South African Air Force's largest defense operation ever.
Brazil could delay the retirement of its Mirages or rely on its fleet of smaller, also aging F-5 jets for patrols during the Cup. One source said Brazil could also "rent" jets just for the tournament, although that could pose challenges for both equipment delivery and proper pilot training.
Rousseff has not indicated which option she favors, although Boeing appears to be the current frontrunner, thanks in part to efforts to deepen its strategic partnership with Brazilian aircraft maker Embraer SA.
Rousseff has said any purchase must lead to technology transfers and other long-term benefits for Brazilian companies. She has also repeatedly told visiting U.S. officials she believes the F-18 is technically the superior jet.
After the United States chose Embraer for a major defense contract on February 27, a senior Brazilian official told Reuters that was a "very good development" for Boeing's hopes in the jets deal.
Analysis: Mexico's reforms hook U.S. investors
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(Reuters) - Don't be fooled by the Mexican stock market's slow start to the year. The country's push for economic reforms and the revival of the economy of its largest trading partner, the United States, are stirring investor interest in Latin America's No. 2 market.
International fund managers say recent announcements of reforms to Mexico's education system and telecommunications sector provide a positive backdrop for U.S. investors to keep putting roughly 30 percent of their allocations for Latin America into Mexican stocks and bonds.
"You saw a lot of optimism around elections and the potential reforms," said Darren Capeloto, portfolio strategist focused on Latin America at Payden & Rygel in Los Angeles.
Mexican President Enrique Pena Nieto, in office since December, has managed to reach agreement with opposition lawmakers to push through reforms, the most important of which will be in the state-dominated energy sector this summer.
After broadly outperforming most emerging markets in 2012 with a 17.8 percent gain, Mexico's benchmark IPC index is down 2 percent .MXX so far this year. The telecom reforms have taken a toll on Carlos Slim's America Movil (AMXL.MX), which accounts for more than 15 percent of the Mexican stock market.
The mobile company's shares have fallen 22 percent in the year to date on investor fears that new regulations will force America Movil to sell assets, compounding earlier concerns about disappointing European investments.
"It is complicated news for American Movil itself in the short-term but clearly this is a positive development from the standpoint of potential growth," said Alberto Bernal, head of research at Miami-based BullTick Capital Markets.
A significant decline in Mexican bond yields and a stronger peso point to investor enthusiasm. Mexico's central bank reported in February that foreign investors poured a record $80 billion into the nation's stocks and bonds, almost five times more than in Brazil.
From the United States, Thomson Reuters' Lipper data shows the allocations of U.S.-based emerging market fund portfolios in Mexico has increased over the last four years, although not in a straight line. By the end of 2012, Mexico represented 5.22 percent of these portfolios of stocks and bonds, versus 4.26 percent at the end of 2009.
MONEY RUSH
Mexico sends almost 80 percent of its exports to the United States and its factories operate in near lock-step with their counterparts north of the border.
"What we also find very interesting is to the degree and extent Mexico can participate in the growth now in the U.S. We will invest in the industrial groups in Mexico," said Joel Wells, a portfolio manager focused on real estate at Purchase, New York-based Alpine Woods Capital.
Infrastructure and housing are two areas attracting investor interest, according to Alpine. Wells pointed to Vesta SAB (VESTA.MX), an industrial real estate company, as a beneficiary of U.S. companies expanding in Mexico given it owns land around airports.
Investors in U.S.-based emerging market funds have pumped an estimated net $4.7 billion into Mexican stocks and bonds in the twelve months ending January 31, out of a total $15 billion of net inflows for the overall Latin American region.
Latin American assets held by these funds total approximately $117 billion, or more than a quarter of the $480 billion in assets under their management, Lipper data shows.
Mexican state oil giant Pemex funds about a third of the government's budget, is the world's No. 7 oil producer and a top exporter to the United States.
Pena wants reforms, including opening up the oil industry to more private investment, to lead to an increase in production.
"The bigger picture is that Mexico is in a structural transformation," said Capeloto, whose firm has $7 billion in fixed income emerging market assets, with Mexico his top pick in the region.
RATE CUTS AND CREDIT OUTLOOK
Other factors contributing to investor optimism in Mexico are the cut in benchmark interest rates to a record-low 4 percent and Standard and Poor's lifting the outlook for the country's credit rating to positive from stable.
S&P cited promising chances for the government to complete its reforms, which would likely lead to an upgrade of its low investment grade rating of BBB.
There has been so much good news surrounding Mexico that its central bank has warned that the inflow of fresh capital could create asset bubbles and strengthen the peso to the point that it stymies growth. The peso's advance is a test of the central bank's hands off approach to monetary policy.
Some economists say they are not concerned with the peso's strength unless it drops below 10 pesos per U.S. dollar.
BullTick's Bernal thinks the peso is undervalued by 20 percent. The peso currently trades at around 12.42 per U.S. dollar. He has a year-end target of 11.75.
"If the central bank starts to get too worried about the Mexican peso valuation at this time it would be reacting in an illogical manner. It is not expensive," he said.
(Reporting by Daniel Bases; Editing by Dan Burns, Tiffany Wu and Diane Craft)
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