A Japanese health ministry panel on Friday recommended approval of the COVID-19 antiviral pill developed by Merck & Co Inc (MRK.N), part of Prime Minister Fumio Kishida's plan to roll out new treatments by year-end as concerns rise about the Omicron variant.

The panel's decision sets the stage for shipments of 200,000 doses across the country from this weekend, based on preparations announced earlier by Kishida.

"I'm convinced the distribution of this drug is a major step forward for our nation's COVID-19 handling," health minister Shigeyuki Goto told reporters after the decision, adding that some medical institutions and pharmacies will start receiving the pill as soon as next Monday.

Japan is betting heavily on oral treatments to keep serious infections and deaths at bay should a feared sixth wave of the pandemic emerge. The government agreed last month to pay Merck and its partner Ridgeback Biotherapeutics about $1.2 billion for 1.6 million courses of their drug molnupiravir.

In addition, Kishida announced last week a deal to procure 2 million doses of a separate antiviral pill developed by Pfizer Inc. And Japan's Shionogi & Co (4507.T) is expected to soon file for approval of its own treatment, supplying another 1 million doses by early next year.

U.S. regulators on Thursday authorized the Merck pill for certain high-risk adult patients. read more

Countries rushed to buy Merck's molnupiravir after very promising initial results, but subsequent company data in late November indicated the drug was markedly less effective than previously thought. France cancelled its order on Wednesday. read more

Asked about the debate over its efficacy, Goto said on Friday the Japanese panel evaluated the use of molnupiravir based mainly on the earlier test result, while adding the updated result "does not negate this drug's effectiveness".

Japan this week confirmed the first known cases of Omicron infections that could not be traced back to overseas travellers. Community transmissions of the variant have now been found in the western cities of Osaka and Kyoto, and a suspected case was announced in Tokyo on Friday. (Reuters)

The United States formally exempted on Wednesday U.S. and U.N. officials doing permitted business with the Taliban from U.S. sanctions to try to maintain the flow of aid to Afghanistan as it sinks deeper into a humanitarian crisis.

It was unclear, however, whether the move would pave the way for proposed U.N. payments of some $6 million to the Islamists for security.

Reuters on Tuesday exclusively reported a U.N. plan to subsidize next year the monthly wages of Taliban-run Interior Ministry personnel who guard U.N. facilities and to pay them monthly food allowances, a proposal that raised questions about whether the payments would violate U.S. sanctions. read more

The Treasury Department declined to say whether the new license would exempt the proposed U.N. payments from U.S. sanctions on the Taliban.

Having designated the Taliban as a terrorist group for years, Washington has ordered its U.S. assets frozen and barred Americans from dealing with them.

The Treasury on Wednesday issued three general licenses aimed at easing humanitarian aid flows into Afghanistan.

Two of the licenses allow U.S. officials and those of certain international organizations, such as the United Nations, to engage in transactions involving the Taliban or Haqqani Network for official business.

A third license gives non-governmental organizations (NGOs) protection from U.S. sanctions on the Taliban and the Haqqani Network for work on certain activities, including humanitarian projects.

A senior U.S. administration official said the Taliban would have to take action to prevent Afghanistan's economy from contracting further.

The United States formally exempted on Wednesday U.S. and U.N. officials doing permitted business with the Taliban from U.S. sanctions to try to maintain the flow of aid to Afghanistan as it sinks deeper into a humanitarian crisis.

It was unclear, however, whether the move would pave the way for proposed U.N. payments of some $6 million to the Islamists for security.

Reuters on Tuesday exclusively reported a U.N. plan to subsidize next year the monthly wages of Taliban-run Interior Ministry personnel who guard U.N. facilities and to pay them monthly food allowances, a proposal that raised questions about whether the payments would violate U.S. sanctions. read more

The Treasury Department declined to say whether the new license would exempt the proposed U.N. payments from U.S. sanctions on the Taliban.

Having designated the Taliban as a terrorist group for years, Washington has ordered its U.S. assets frozen and barred Americans from dealing with them.

The Treasury on Wednesday issued three general licenses aimed at easing humanitarian aid flows into Afghanistan.

Two of the licenses allow U.S. officials and those of certain international organizations, such as the United Nations, to engage in transactions involving the Taliban or Haqqani Network for official business.

A third license gives non-governmental organizations (NGOs) protection from U.S. sanctions on the Taliban and the Haqqani Network for work on certain activities, including humanitarian projects.

A senior U.S. administration official said the Taliban would have to take action to prevent Afghanistan's economy from contracting further. (Reuters)

Putin says Russia doesn't want conflict but needs 'immediate' guarantees

Russia wants to avoid conflict with Ukraine and the West, President Vladimir Putin said on Thursday, but needs an "immediate" response from the United States and its allies to its demands for security guarantees.

Ukraine is at the centre of soaring East-West tensions after the United States and Kyiv accused Russia of weighing a new attack on its southern neighbour, an allegation Moscow denies.

Putin was plied with questions about the risk of conflict with Ukraine during his marathon annual news conference, which lasted over four hours.

"This is not our (preferred) choice, we do not want this," he told reporters.

Tensions over Ukraine have pushed Moscow's relations with the West to their lowest point since the collapse of the Soviet Union some 30 years ago.

The United States, the European Union and the Group of Seven have all warned Putin he will face "massive consequences" including tough economic sanctions in the event of any new Russian aggression.

Putin said Russia had received a generally positive initial response to security proposals it handed to the United States this month designed to defuse the crisis and that he was hopeful about the prospect for negotiations, which he said would start early next year in Geneva.

But in a separate reply, Putin grew more heated when recalling how NATO had "brazenly tricked" Russia with successive waves of expansion since the Cold War, and said Moscow needed an answer urgently.

"You must give us guarantees, and immediately - now," he said.

A Biden administration official in a call with reporters said Washington has taken note of the concerns that Moscow has raised and was ready to engage with Russia as soon as early January but a specific date and location were yet to be set.

Speaking on condition of anonymity, the administration official repeatedly said the United States would not negotiate publicly and that it would provide its full response to Russian proposals in January.

"I expect we will have our substantive response in those (January) talks.... clearly there are some things that have been proposed that we’ll never agree to. I think the Russians probably know that on some level. I think there are other areas where we may be able to explore what's possible," the official said.

Russia rejects Ukrainian and U.S. accusations that it may be preparing an invasion of Ukraine as early as next month by tens of thousands of Russian troops deployed within reach of the border of the country which like Russia is a former Soviet republic. read more

It says it needs pledges from the West - including a promise not to conduct NATO military activity in Eastern Europe - because its security is threatened by Ukraine's growing ties with the Western alliance as well as the possibility of NATO missiles being deployed against it on Ukrainian territory.

"We just directly posed the question that there should be no further NATO movement to the east. The ball is in their court, they should answer us with something," Putin said.

NEW CEASEFIRE

Putin accused Ukraine of breaking its commitments under a 2015 deal meant to halt fighting in its eastern Donbass area between Ukrainian and pro-Russian forces, and refusing to talk to representatives of two breakaway regions there.

Ukraine's foreign ministry said Kyiv, on the contrary, had done "titanic work" to bring about a new ceasefire agreement in the east on Wednesday. The Ukrainian military reported, however, that the "armed formations of the Russian Federation" had violated the latest truce three times in the course of Thursday, including with mortars and heavy grenade launchers.

There were no casualties from those incidents, it said.

Four sources have told Reuters that Russian mercenaries have deployed to separatist-controlled eastern Ukraine in recent weeks to bolster defences against Ukrainian forces. read more

Swedish Foreign Minister Ann Linde, chair of the Organisation for Security and Cooperation in Europe (OSCE) which has a monitoring mission in the conflict zone, called the ceasefire a "small but important first step towards de-escalation along the contact line".

The Biden administration official also welcomed the move, but called it a "small step."

Lithuania's defence chief, Lieutenant General Valdemaras Rupsys, warned that the crisis could spread to Belarus.

"It's possible that in case of escalation (in Ukraine), or, if we see that Belarus could be finally occupied (by Russia), extra NATO troops could be deployed in Lithuania." he told

Lithuanian news website 15min.

Rupsys said Belarus armed forces were no longer operating independently, while the country's air defence system had been fully integrated with Russian one, and Belarus could be "fully occupied" in the near future.

Ukraine rejects Putin's stance that Moscow is just a mediator in the conflict, accusing it of providing direct backing to the separatist side. It has repeatedly offered direct talks with Russia, which Moscow has so far rejected.

Putin made clear he did not see President Volodymr Zelenskiy as a negotiating partner, accusing him of falling under the influence of what he called radical nationalist forces.

"How can I build a relationship with the current leadership, given what they are doing? It's practically impossible," he said.

Many of Russia's security proposals, which would require the withdrawal of U.S. and allied forces from central and eastern European countries that joined NATO after 1997, are seen as non-starters in the West.

But the United States and NATO have said they will discuss the package with Russia early next year, aware that outright rejection could further inflame the crisis over Ukraine. (Reuters)

Japan's record $940 bln budget to help recovery as fiscal reform in back seat

Japan's cabinet approved on Friday an annual budget of $940 billion that is a record for a tenth straight year, putting priority on the response to battling COVID-19 and the prime minister's aim of growth and wealth distribution.

The budget of 107.6 trillion yen ($941.55 billion) for the fiscal year that starts in April 2022 is Japan's biggest initial spending plan, underscoring a priority of reviving the pandemic-hit economy over returning to long-term fiscal health.

However, when asked if heavy spending to fight the COVID-19 pandemic could force the government to alter its primary balance target, Finance Minister Shunichi Suzuki said, "I don't think so, for now."

Suzuki renewed his pledge to stick to the target, saying it was important to keep up efforts to improve public finances as the cornerstone of Japan's credibility.

Prime Minister Fumio Kishida's first budget, which parliament must approve by the end of the current fiscal year in March, comes days after the body approved 36 trillion yen of record extra stimulus spending to aid the COVID-19 recovery.

Bigger spending meant fiscal discipline was loosening among Japanese policymakers who are counting on the Bank of Japan's ultra-loose monetary policy to keep borrowing costs low, analysts said.

"Politicians show no signs of making efforts to repay government debt," said Yasunari Ueno, chief market economist at Mizuho Securities. "The lack of fiscal discipline is the biggest side effect of the BOJ's massive monetary easing."

The budget includes 5 trillion yen for emergency costs of COVID-19, a record defence outlay of 5.37 trillion, the largest-ever welfare cost of 36.3 trillion and 24.3 trillion yen for debt servicing.

Public debt in Japan, the world's third-largest economy, is more than twice the size of its $5 trillion economy, the heaviest among industrialised countries.

Kishida has pledged to improve public finances in the long run and the budget foresees new borrowing of 36.9 trillion yen next year, less than this year's initial plan of 43.6 trillion.

Lower borrowing will be replaced with higher tax revenues, seen rising for the first time in two years to a record 65.2 trillion yen as COVID-19 curbs on economic activity ease.

The government estimates real economic growth of 3.2% in the next fiscal year, up from a prior estimate of 2.2%. The estimates form the basis for the budget plan.

But with debt still accounting for 34.3% of the budget, it will be tough to achieve a primary budget surplus by fiscal year 2025/26 as the government aims to do.

The primary budget deficit, which excludes new bond sales and debt servicing, is seen at 13 trillion yen in the next fiscal year, higher than an estimate of 20 trillion for this year, but still off from the government's target. (Reuters)

Look beyond the lights and remember the poor, pope says on Christmas eve