NAIROBI (Reuters) - Kenya will sign a trade pact with Russia aimed at boosting cooperation between businesses, President William Ruto's office said on Monday, after hosting Russian Foreign Minister Sergei Lavrov in Nairobi.

Russia has stepped up its drive to boost economic ties with Africa to help offset a big chill in relations with the West prompted by its invasion of Ukraine, and plans to hold an Africa-Russia summit in St Petersburg in July.

Kenya's presidency said in a statement that bilateral trade with Russia was still low despite the potential and the pact would give business the "necessary impetus".

It did not say when the pact might be sealed or give details on what it might encompass. Russia currently sells mostly grain and fertilisers to Kenya.

On Ukraine, the statement reiterated Kenya's support for respecting the territorial integrity of all countries, adding:

"Kenya calls for a resolution of the conflict in a manner respectful to the two parties."

Russia says its invasion of Ukraine, launched on Feb. 24, 2022, is aimed at protecting its own security against Ukraine's pro-Western leadership.

Kyiv and its Western allies accuse Moscow of waging an unprovoked war of aggression. Western nations have slapped sweeping economic sanctions on Russia, prompting it to forge closer ties with China, India, African nations and others.

Lavrov has visited the African continent at least three times this year, while Ukraine's foreign minister Dmytro Kuleba travelled to countries including Ethiopia, Rwanda and Mozambique last week.

Kenya's presidency said Lavrov was on his way to Cape Town for a June 1 meeting of foreign ministers of the BRICS group of emerging economies, which comprises Brazil, Russia, India, China and South Africa.

By Liangping Gao and Ryan Woo

BEIJING (Reuters) - China's new home prices will see a slower growth this year, according to a Reuters poll, suggesting pent-up demand after the country's economic reopening is fading though a slew of stimulus policies boosted confidence.

New home prices are expected to rise 1.4% year-on-year in 2023, slowing from a gain of 2.5% forecast for that period in a February survey, according to a Reuters poll conducted in May.

A string of stimulus policies to the crisis-hit property sector and the lifting of COVID-19 restrictions in December have boosted sentiment in recent weeks.

The revival, however, seems to be uncertain after the pent-up demand was released on top of the patchy economic recovery. Property investment and sales fell sharply in April, and the pace of home price gains slowed during the month.

"Residents' confidence in their incomes and expectations of house prices declines, as well as homebuyers' concerns about the presold homes unable to deliver, remain key factors impacting homebuyers to enter the market," said analyst Huang Yu at China Index Academy.

Property sales are expected to rise 2.7% from a year earlier for the whole of 2023, reversing a fall of 1.5% expected in the last poll, the survey showed.

A homeowner's failure to sell a flat in Beijing after dropping the asking price by 900,000 yuan in one month has created a buzz on social media on Friday.

"Homeowners need to sell at a lower price than the market if they want to sell their homes quickly in Beijing," said a property agent surnamed Lu, and she raised doubts on the sector's recovery in the coming months.

"China's property market has not yet stabilized and is still in a slow recovery from the bottom. The central and local governments are still releasing policies to support property market," said Wang Xingping at Fitch Bohua.

Property investment by developers is expected to fall 4.2% on year for 2023.

"In 2023, the property investment will mainly be driven by completion construction, and the decline in land purchase and new construction is expected to continue due to weak sales. We expect the decline in property investment for 2023 to narrow to around zero," said Wang.

"China property is set for another year of softening," said S&P Global (NYSE:SPGI) Ratings on Sunday，adding "weaknesses in China's tier-three and tier-four cities will keep the property recovery on an 'L-shaped' path. "

(For other stories from the Reuters quarterly housing market polls:)

($1 = 6.9121 Chinese yuan renminbi)

By Rae Wee

SINGAPORE (Reuters) - The dollar eased on Friday but remained near a two-month high against its major peers, buoyed by expectations that U.S. interest rates could remain higher for longer.

Debt ceiling negotiations between U.S. President Joe Biden and top congressional Republican Kevin McCarthy also continued to cast a shadow over the market mood, though news that the two are closing in on a deal aided investor sentiment and caused the greenback to pause its recent rally.

The dollar edged away from a six-month high against the yen in Asia trade and last stood at 139.77, having reached 140.23 yen in the previous session, its highest since November.

Against a basket of currencies, the U.S. dollar slipped 0.13% to 104.09, just off Thursday's two-month high of 104.31.

The index was, nonetheless ,on track for a third straight weekly gain of more than 0.8%, as traders ramped up their expectations of how much further rates could rise in the United States.

"Recent moves in currencies have been mainly driven by a sharp repricing of FOMC policy," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY) (CBA).

Money markets are now pricing in a 40% chance that the Federal Reserve will deliver another 25-basis-point rate hike at its policy meeting next month, while expectations that the Fed will begin cutting rates later this year have been scaled back.

Data released on Thursday showed that the number of Americans filing new claims for unemployment benefits increased moderately last week to 229,000, coming in lower than expectations.

The British pound and the euro were struggling to recoup their losses against a stronger dollar.

Sterling gained 0.13% to $1.2337, though it was still headed for a weekly loss of more than 0.8%. The euro rose 0.15% to $1.0741, but was not far from its two-month low of $1.0708 hit in the previous session.

The single currency was also weighed down by confirmation that Europe's largest economy Germany slipped into a recession in early 2023.

CHINA'S RECOVERY STALLS

Among other currencies, the Aussie was last 0.22% higher at $0.6520. It slumped to a more than six-month low of $0.6490 earlier in the session, further pressured by China's faltering post-COVID economic recovery.

"Data in the near-term for China will remain pretty weak and continue to point to a soft consumption recovery," said CBA's Kong. "That will be another weight to the Aussie."

The Australian dollar is often used as a liquid proxy for the Chinese yuan.

The kiwi rose 0.15% to $0.6071, though it was headed for a weekly loss of more than 3%, its largest since September, after the Reserve Bank of New Zealand earlier this week stunned markets by signalling it was done tightening.

China's yuan rebounded from a near six-month low against the dollar as some major state-owned banks sold the U.S. currency to prevent the yuan from sinking further.

"General renminbi depreciation is back in play," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

TOKYO (Reuters) -Japan and the United States are likely to issue a joint statement on semiconductor and advanced technology cooperation on Friday, the Yomiuri daily newspaper reported without disclosing where it obtained the information.

Japan's Minister of Economy, Trade and Industry Yasutoshi Nishimura and U.S. Secretary of Commerce Gina Raimondo will meet in the U.S. city of Detroit where Nishimura is attending the 2023 APEC Ministers Responsible for Trade Meeting to agree on the joint statement's contents, Yomiuri reported.

The United States has been garnering support among allies to join it in countering China in technological development at a time when Asia's biggest economy is becoming increasingly assertive on the international stage.

Washington has imposed a series of export controls on chipmaking technology to China whereas Beijing has barred operators of key infrastructure from using products from U.S. chipmaker from Micron Technology Inc (NASDAQ:MU).

Last week, the leaders of the Group of Seven advanced democracies, including the U.S. and Japan, took issue with what they called China's "economic coercion" and agreed to reduce exposure to the world's second-largest economy.

A new Japan-U.S. statement is likely to include a roadmap for the development of next-generation semiconductors as well as plans to cooperate in artificial intelligence and quantum technology, the Yomiuri reported.

Ahead of meeting her Japanese counterpart, Raimondo on Thursday met China's Minister of Commerce Wang Wentao in Washington where the pair exchanged views on trade, investment and export policies.

By Takahiko Wada and Leika Kihara

TOKYO (Reuters) -Core consumer inflation in Japan's capital slowed in May but a key index stripping away the effect of fuel hit a four-decade high, underscoring broadening price pressure that may keep alive expectations of a withdrawal of ultra-loose monetary policy.

The data for Tokyo, which is seen as a leading indicator of nationwide trends, showed companies continued to pass on rising costs to households in a sign inflationary pressure could last longer than the Bank of Japan (BOJ) projects.

The Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 3.2% in May from a year earlier, government data showed on Friday, roughly matching a median market forecast for a 3.3% gain.

Inflation slowed from the previous month's 3.5% but stayed above the BOJ's 2% target for a full year, the data showed.

The dollar pared some losses against the yen after the data and stood around 140.05 in Asia trade on Friday.

A separate index stripping away both fresh food and fuel costs rose 3.9% in May from a year earlier, marking the fastest pace of increase since April 1982 when Japan was experiencing an asset-inflated bubble.

Japan's economy is finally recovering from the scars of the COVID-19 pandemic, though risks of a global slowdown and rising food prices hang over the outlook for exports and consumption.

With inflation already exceeding its target, markets are rife with speculation the BOJ could soon phase out ultra-loose monetary policy under new governor Kazuo Ueda.

Ueda, however, has brushed aside the chance of a near-term policy tweak, stressing that inflation must sustainably hit the BOJ's 2% target and accompanied by solid wage growth for the bank to consider phasing out stimulus.

By Lucinda Elliott and Eliana Raszewski

BUENOS AIRES (Reuters) - Argentine Vice President Cristina Fernandez de Kirchner slammed the International Monetary Fund (IMF) on Thursday, saying that the program agreed to with the multinational lender is holding back the country's economy.

Fernandez de Kirchner, speaking at an event commemorating Revolution Day in Buenos Aires' historic Plaza de Mayo, said the debt is impossible to pay off.

The government's ruling coalition is attempting to shore up support from the IMF and advance payments ahead of October elections.

"If we are do not set aside this program ... to develop our own plan for growth and industrialization, it will be impossible to pay for," the vice president said, standing alongside Economy Minister Sergio Massa, who is trying to keep the $44 billion program on track.

She said the original deal was "political" and that the IMF program does not allow the country to distribute wealth. 

"The dead do not pay their debts," Kirchner said, quoting her late husband and former president, Nestor Kirchner, to thousands who gathered despite heavy rain.

Nestor Kirchner had uttered that line while president in 2005 when he announced that Argentina would pay off its $9.8 billion debt to the IMF before year-end and avoid a full-blown default. Like his wife, he repeatedly blamed the fund for bringing about poverty and "destitution."

The South American grains producer has a fraught history with the IMF. The country agreed to a $57 billion program with the Washington-based body in 2018 under former conservative leader Mauricio Macri to stave off economic crisis. That failed and was replaced last year with a deal to refinance the $44 billion in outstanding debt.

Fernandez de Kirchner, 70, a veteran on the left of the ruling Peronist party who served two terms as president between 2007 and 2015, called the original deal "scandalous" and a "scam" last week.

Her speech comes as Massa and his team are negotiating with the IMF to bring forward the disbursement of loans agreed to in 2022. A historic drought has hit grain exports, Argentina's top source of dollars, forcing both sides into talks to potentially revamp the deal.

The government wants faster payouts and easier economic targets as it works to rebuild reserves needed to cover trade costs and future debt repayments.

Massa is due to travel to China on May 29 to potentially expand Argentina's currency swap line with Beijing.

The ruling coalition faces an uphill battle against the conservative opposition in the Oct. 22 election, as voter dissatisfaction with soaring inflation, stagnant wages and years of economic turmoil dents public support.

Kirchner has insisted she will not run again, as has the current president, Alberto Fernandez.

(This story has been refiled to transpose the words 'the' and 'current' in paragraph 14)

Argentina VP says IMF hinders growth in Revolution Day speech

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By Kate Abnett

BRUSSELS (Reuters) - Increased political resistance to new EU laws to protect the environment has left the European Commission fighting to keep intact its vision for Europe's green transition.

Ahead of elections in the European Parliament in June next year, the European Union is racing to finish legislation that includes two landmark nature bills - binding targets for countries to restore damaged natural habitats and a goal to halve chemical pesticide use by 2030.

Much EU environment legislation has been passed over the last two years, but the appetite on the part of some lawmakers and member states for more is waning and farming groups say further change must be conditional on more financial support.

Brussels proposed the nature measures last June. Opposition has mounted in recent weeks, as EU countries and lawmakers prepare for the final negotiations. The European Parliament's biggest group, the European People's Party, has called for the nature law to be scrapped saying it would hurt farmers.

"It's just too much. People are frustrated with new rules every year," EPP lawmaker Peter Liese said.

The Commission proposal gives countries discretion to decide how and where to reverse biodiversity loss. But that flexibility, Liese said, makes it impossible for farmers to prepare.

"No farmer can predict what's happening on his land, what kind of rules he has to follow, in the next years," Liese said.

Other EU green proposals have also met resistance. And as the elections approach, unfinished laws are piling up. Their fate would be unclear under a new EU Parliament with a different composition.

French President Emmanuel Macron this month suggested a pause on new European environment regulation, to give industries time to absorb recently-agreed laws.

The Commission last week delayed another scheduled package of environmental proposals, plus a bill on microplastic pollution. A Commission spokesperson declined to comment on the reason for the delay.

Meanwhile, EU countries are pushing to weaken proposed pollution curbs for farms and methane emission limits for energy producers. Some capitals want to scrap new car pollution limits, and the EU's renewable energy targets are deadlocked by an argument over whether nuclear energy can be included.

NATURE AND CLIMATE LINK

In the last two years, the Commission, whose make-up will also change following next year's parliamentary elections, has proposed more than 30 laws designed to deliver green goals. The aim is to steer countries towards the EU's target to have zero net greenhouse gas emissions by 2050.

Most have been successfully passed, including tighter CO2 limits for cars, higher CO2 costs for industries and requirements to expand CO2-absorbing forests.

Many of the remaining bills are focused less on planet-warming CO2 emissions than on other environmental calamites - pollution, the collapse of bee and butterfly populations, or Europe's poor soil health.

EU officials say these crises are just as important as climate change, and are inextricably linked.

Restored ecosystems such as forests and peatlands, for instance, absorb more CO2 emissions. Greenhouse gas emissions from agriculture - the sector most affected by the nature laws - have barely fallen since 2005, the European Environment Agency has said.

Scientists have also raised alarm that drastic declines in insect populations have serious implications for other species and food crop yields.

"Without the nature pillar, the climate pillar is also not viable," EU climate policy chief Frans Timmermans told EU lawmakers this week.

Campaigners say losing the bill would also undermine the EU's international standing, after it lobbied for more ambitious global action at last year's U.N. biodiversity COP15 summit.

    Some countries, however, say more environment laws would overburden industries and risk denting political support for green measures.

Belgian Prime Minister Alexander De Croo this week said nature restoration, pesticide control and soil quality needed to be addressed, but he considered they were "lower ranked priorities" than tackling climate change.

"We could lose that momentum that we have built if we overburden ourselves with challenges that are not as life-threatening as climate change," he told the Wirtschaftstag economic conference.

NATURE VERSUS INFRASTRUCTURE

In closed-door negotiations, countries are seeking a long list of changes to the nature restoration law, diplomats said.

Denmark and the Netherlands are among those that want amendments to ensure countries can still quickly build infrastructure such as wind farms in areas where nature is being restored.

"We cannot do everything everywhere - housing, energy transition, nature restoration, flood protection," Dutch Nature Minister Christianne van der Wal told Reuters.

Farming groups say the EU's increasing environmental demands are not being matched with funding - which they say should be in addition to the EU's existing farming subsidies.

"The missing EU funding for this is a clear problem," said Pekka Pesonen, who heads European farming group Copa-Cogeca.

Even if countries find a compromise, the European Parliament could block the law, if other lawmaker groups side with the EPP. Two EU Parliament committees this week voted to reject it, signalling a tough vote ahead in the full Parliament.

By David Morgan, Andrea Shalal and Moira Warburton

WASHINGTON (Reuters) -Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the United States' $31.4 trillion debt ceiling and avoid a catastrophic default.

After a four-hour White House meeting, U.S. House Speaker McCarthy said negotiations had improved and would continue in the evening. He predicted the two sides would reach an agreement, though several issues remain unresolved.

"We've made some progress working down there. So that's very positive," McCarthy told reporters. "I want to make sure we get the right agreement. I can see that we're working towards that."

White House spokesperson Karine Jean-Pierre said talks remain fruitful.

"If it keeps going in good faith, we can get to an agreement here," she said at a briefing while discussions were taking place.

But the White House and congressional Democrats also accused Republicans of taking the economy hostage to advance an agenda they could otherwise not pass. They said Republicans need to make more concessions as they will need Democratic votes to pass any deal.

"Just listen to members of The House Freedom Caucus... now openly referring to the full faith and credit of the United States as a hostage," Jean-Pierre, the White House spokesperson, said.

Ratings agency have taken note of the impasse with McCarthy insisting on spending cuts while Biden wants to hold spending steady.

Fitch put the United States' "AAA" ratings on negative watch on Wednesday. The agency said it believes "risks have risen" that the debt ceiling will not be raised before the so-called X-date, when the Treasury runs out of money, adding that "increased political partisanship... is hindering reaching a resolution."

A White House spokesperson said the Fitch rating is "one more piece of evidence that default is not an option and all responsible lawmakers understand that. It reinforces the need for Congress to quickly pass a reasonable, bipartisan agreement to prevent default.”

Moody's (NYSE:MCO), another rating agency, might change its assessment of U.S. debt if lawmakers indicate a default is expected. Moody's currently has a top-notch "AAA" rating for U.S. debt, while rival rating agency S&P Global (NYSE:SPGI) lowered its rating following a 2011 debt-ceiling showdown. A lower rating could push up borrowing costs.

Time is running short, as the Treasury Department has warned the federal government could be unable to pay all its bills by as soon as June 1 - just eight days away - and it will take several days to pass legislation through the narrowly divided Congress.

House Republican leaders said they would adjourn on Thursday for a week-long Memorial Day holiday recess scheduled but would call lawmakers back if needed for any votes, Punchbowl News reported.

McCarthy has insisted that any deal must not raise taxes and must cut discretionary spending, not hold it steady as Biden has proposed.

Any deal that Biden and McCarthy reach will have a narrow path for passage through the divided Congress, where McCarthy's Republicans hold a 222-213 House majority and Biden's Democrats control the Senate by a 51-49 margin.

The lack of progress has heightened concerns that Congress could inadvertently trigger a crisis by failing to act in time.

"We're certainly getting to a place that's too close for comfort," said Shai Akabas of the Bipartisan Policy Center, a think tank.

STOCKS SLIDE

The months-long standoff has spooked Wall Street, weighing on U.S. stocks and pushing the nation's cost of borrowing higher.

U.S. stock indexes fell on Wednesday on debt-ceiling concerns.

"Up until yesterday, investors have been very optimistic," said Angelo Kourkafas, senior investment strategist at Edward Jones. "But now as we get closer ... we are seeing some caution again."

Treasury Secretary Janet Yellen on Wednesday said the United States will be unable to pay all its bills by early June but said she did not know exactly what day the government will run out of resources.

That would trigger a Wall Street meltdown and push the U.S. economy toward recession, with the default also hitting regular Americans, economists say. Medical providers that rely on government payments could be among the first to feel the heat.

Republicans want to cut discretionary spending for the 2024 fiscal year beginning in October by roughly 8%, while Democrats have pushed to hold it steady at this year's rate.

Negotiators differ over Republicans' proposals to impose new work requirements on benefits programs for low-income Americans and loosen energy permitting rules.

The White House has offered to limit discretionary spending for the coming two years, in line with previous bipartisan budget agreements. Republicans have offered spending caps for the coming six years.

Republicans have rejected White House proposals to set a minimum tax on corporations and billionaires and broaden the government's ability to negotiate lower prices for prescription drugs, according to Democratic Representative Pramila Jayapal, who leads the 101-member Congressional Progressive Caucus.

Congress regularly needs to raise the nation's self-imposed debt limit to cover the cost of spending and tax cuts it has already approved.

By Leika Kihara and Takahiko Wada

TOKYO (Reuters) - The Bank of Japan (BOJ) may abandon a controversial bond yield cap this year if risks clouding the outlook, such as global banking sector woes, subside, Toshihiro Nagahama, an economist who participated in a key government panel, told Reuters.

Nagahama, who was invited to speak at the panel's special session on economic policy held May 15, said Japan must avoid removing monetary and fiscal support prematurely to ensure recent positive signs in wage and consumption are sustained.

Until there is clarity that wages will keep rising steadily next year, the BOJ must hold off raising its short-term interest rate target from the current level of -0.1%, he said in an interview on Wednesday.

As long as short-term borrowing costs are kept low, however, the central bank could remove a 0.5% cap set on the 10-year bond yield without causing too much damage to the economy, said Nagahama, an economist at Dai-ichi Life Research Institute.

The BOJ will probably wait until concern over global banking sector woes and the U.S. debt ceiling standoff eases, he said.

"Once such risks subside and markets remain calm, the BOJ may tweak yield curve control," Nagahama said. "I won't be surprised if such a move occurs this year."

As part of efforts to reflate the economy and sustainably push inflation to its 2% target, the BOJ guides short-term rates at -0.1% and pledges to guide the 10-year bond yield around 0% under a policy dubbed yield curve control (YCC).

In December, the BOJ raised the cap to 0.5% from 0.25%, after being forced to ramp up bond buying to defend the ceiling against investors betting on a near-term tweak to YCC.

The 10-year Japanese government bond yield has recently hovered around 0.4%, after the BOJ took a range of steps to counter market attacks against the cap.

With inflation exceeding its 2% target, markets are simmering with speculation the BOJ will remove or raise the 0.5% yield cap that has drawn criticism for distorting market pricing.

BOJ Governor Kazuo Ueda said last week the central bank was unwavering in its commitment to maintain ultra-loose policy, ruling out the chance of a near-term tweak to YCC.