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By Stephen Nellis SAN FRANCISCO (Reuters) -U.S. lawmakers are calling for broader bans on chipmaking equipment to China after a bipartisan investigation found that Chinese chipmakers had purchased $38 billion of sophisticated gear last year. Inconsistencies in rules issued by the United States, Japan and the Netherlands have led to non-U.S. chip equipment manufacturers selling to some Chinese firms that U.S. companies could not, according to a report published on Tuesday by the U.S. House of Representatives Select Committee on China. The committee called for broader bans by the U.S. and its allies on chipmaking tool sales to China, rather than narrower bans on sales to specific Chinese chipmakers. The $38 billion was purchased from five top semiconductor manufacturing equipment suppliers, without breaking the law, a 66% increase from 2022, when many of the tool export restrictions were introduced. That accounted for nearly 39% of the aggregate sales of Applied Materials, Lam Research, KLA, ASML and Tokyo Electron, the report found. "These are the sales that made China increasingly competitive in the manufacture of a wide range of semiconductors, with profound implications for human rights and democratic values around the world," the report said. Both U.S. Democratic and Republican administrations have sought to restrict China's ability to make microchips – crucial to fields such as artificial intelligence and military modernization. The two economic superpowers are also vying to sell advanced technology such as AI data centers to other nations. Mark Dougherty, president of Tokyo Electron's U.S. unit, said the industry's China sales have started to decline this year, in part due to new regulations and welcomed more coordination between the U.S. and Japanese governments. "I think it’s clear, from a U.S. perspective, there’s an outcome that is still desired that has not yet been achieved," Dougherty told Reuters in an interview. ASML and KLA declined to comment. Applied Materials and Lam Research did not respond to a request for comment. The committee said the toolmakers cooperated with the committee on the report and were informed of its findings. Three Chinese firms that have become major customers of toolmakers – SwaySure Technology Co, Shenzhen Pengxinxu Technology Co and SiEn (Qingdao) Integrated Circuits Co – are of particular security concern. They were flagged last year by the congressional committee's leaders, Chairman John Moolenaar, a Michigan Republican, and Ranking Member Raja Krishnamoorthi, an Illinois Democrat, in a letter to the Commerce Department alleging ties to a secret network aiding Huawei Technologies, and U.S. officials barred exports to them in December.  The report recommended that the broader bans include tighter restrictions on components that China could use to build its own chipmaking tools. "China is attempting to rewrite the entire supply chain," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, a think tank. "What used to be niche tool segments are now battlegrounds." (Reporting by Stephen Nellis in San Francisco; Editing by Peter Henderson, Shri Navaratnam and Edwina Gibbs)

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By Anushree Mukherjee and Brijesh Patel (Reuters) -Gold pushed through $4,000 an ounce to hit a record on Wednesday, driven by investors seeking safety from mounting economic and geopolitical uncertainty, alongside expectations of further interest rate cuts by the U.S. Federal Reserve. Spot gold was up 0.5% at $4,002.53 per ounce by 0213 GMT. U.S. gold futures for December delivery gained 0.5% to $4,025 per ounce. Traditionally, gold is seen as a store of value during times of instability. Spot gold is up 52% year-to-date after rising 27% in 2024. "There's so much faith in this trade right now that the market will look for the next big round number which is 5,000 with the Fed likely to continue to lower rates," said Tai Wong, an independent metals trader. "There will be some bumps in the road like a lasting truce in the Mideast or Ukraine but the fundamental drivers of the trade, massive and growing debt, reserve diversification, and a weaker dollar are unlikely to change in the medium term." The metal's rally has been driven by a cocktail of factors, including expectations of interest rate cuts, ongoing political and economic uncertainty, solid central bank buying, inflows into gold exchange-traded funds and a weak dollar. The U.S. government shutdown entered its seventh day on Tuesday. The shutdown has postponed the release of key economic indicators, forcing investors to rely on secondary, non-government data to gauge the timing and extent of Fed rate cuts. Investors are now pricing in a 25-basis-point cut at the Fed meeting this month, with an additional 25-bp cut anticipated in December. Additionally, political turmoil in France and Japan has also boosted demand for the safe-haven bullion. A "fear of missing out" is also boosting the rally, analysts say. "What we see now is that investors are buying gold, despite the price being high, and this is amplifying the move further," said UBS analyst Giovanni Staunovo. Spot silver rose 0.5% to $48.03 per ounce, platinum gained 2.2% to $1,653.21 and palladium climbed 1.3% to $1,355.32. (Reporting by Anushree Mukherjee, Anmol Choubey and Brijesh Patel in Bengaluru; Editing by Sriraj Kalluvila and Christian Schmollinger)

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By Lucy Craymer WELLINGTON (Reuters) -New Zealand's central bank slashed its benchmark rate by an aggressive 50 basis points on Wednesday, surprising some in the markets as policymakers signalled concerns about the frail state of the economy and kept the door open for further easing. The New Zealand dollar and interest rate swaps tumbled in the wake of the move that took the official cash rate to 2.5%, as investors bet on more stimulus in the coming months to shore up demand and buffer the economy from rising global headwinds. “The Committee reached consensus to reduce the official cash rate by 50 basis points to 2.5 percent,” the RBNZ said in its accompanying policy statement. “The Committee remains open to further reductions in the OCR as required for inflation to settle sustainably near the 2% target mid-point in the medium term.” The dovish stance will be a welcome relief for the New Zealand government and the country’s prime minister, Christopher Luxon, whose popularity has taken a sharp hit in recent months as the economic recovery he and his party campaigned on has failed to eventuate. Luxon has said publicly he would like to see the cash rate lower to try and shake off the economic torpor, with households in a depressed mood as they fret about the rising cost of living and scarcity of jobs. The Taxpayers' Union-Curia Poll released earlier Wednesday found that the current government would not have enough seats to govern if an election was held today. The RBNZ decision went against 15 of 26 economists surveyed in a Reuters poll who had forecast the Reserve Bank of New Zealand would cut the official cash rate by 25 basis points.  However, the larger cut wasn't totally unexpected as the remaining 11 economists had picked a 50-bp reduction and markets were primed for the RBNZ to pull harder on its monetary policy levers to inject impetus to a weakened economy. The New Zealand dollar fell 0.90% to $0.5745, while two-year interest rate swaps fell to 2.5251% from 2.6194% before the decision. “The RBNZ’s decision signals that the likelihood of inflation pressures being weaker than previously anticipated carried more weight than waiting to see how quickly the economy rebounds and what ripple effects come from the current spike in inflation,” ASB chief economist Nick Tuffley said in a note. The central bank has cut rates by 300 basis points since August 2024, and with inflation within its target band of 1% to 3%, policymakers have leeway to lower borrowing costs further. TRUMP POLICIES ADD TO ECONOMIC WOES  Wednesday's policy meeting is Christian Hawkesby’s second-to-last meeting as RBNZ Governor, after the government last month appointed Swedish policymaker Anna Breman to the role starting Dec. 1. A global front-runner in withdrawing pandemic-era stimulus, the RBNZ lifted rates 525 basis points between October 2021 and September 2023 to curb inflation in the most aggressive tightening since the official cash rate was introduced in 1999. The punishing borrowing costs, however, slammed the brakes on demand and tipped the economy into recession last year. Since then it has struggled to motor on, contracting by 0.9% in the second quarter in a shock result that fuelled bets of steeper rate cuts. While trading partner growth has been resilient, it is expected to slow in part due to U.S. President Donald Trump's sweeping tariffs and the government’s tight fiscal policy, hurting business confidence and pushing up unemployment. One challenge for the bank is that inflation ticked up to 2.7% in the second quarter and the central bank expects inflation to reach 3.0% in the third quarter. However, in its statement on Wednesday, the RBNZ said spare capacity in the economy should see inflation return to near its mid-point in 2026. New Zealand is one of several countries to ease rates as inflation has moved lower, but its sharp reductions to borrowing costs contrast with a more cautious approach by the U.S. Federal Reserve and its counterpart in Australia. The Reserve Bank of Australia held the cash rate steady last week as it flagged inflation concerns. And last month, the Federal Reserve delivered its first rate cut for the year. (Reporting by Lucy CraymerEditing by Shri Navaratnam)

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By Ankur Banerjee SINGAPORE (Reuters) -Asian stocks tracked Wall Street lower on Wednesday as investors grappled with the fallout from political drama in France and Japan, while a prolonged U.S. government shutdown catapulted gold spot prices to a record $4,000 per ounce level. The Japanese yen hovered near eight-month lows as investors awaited fiscal policy cues from prime minister-in-waiting Sanae Takaichi, while the euro was under pressure after French prime minister Sebastien Lecornu resigned on Monday. That left the dollar fairly upbeat. The dollar index, which measures the U.S. currency against six other units, hit its highest level since the end of August, although sentiment remained dim as the shutdown was due to enter its eighth day. In stocks, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1%, inching away from the 4-1/2 year high it hit on Tuesday. China and South Korea markets were closed for a long holiday. Japan's Nikkei rose 0.35%, just shy of the record peak touched in the previous session. All eyes are on the Japanese markets after a surprise victory over the weekend for fiscal dove Takaichi spurred worries over the fiscal and monetary policy outlook, with traders swiftly cutting their bets on another hike this year. "Takaichi's victory in the ruling Liberal Democratic Party leadership race has shifted the balance of risks to a later rate hike in 2026," said Carol Kong, currency strategist at Commonwealth Bank of Australia. Kong said option traders are now the least bearish on dollar/yen since September 2022 but she still expects the dollar to trend lower against the yen in the near term. The yen weakened to 152.33 per U.S. dollar, trading at its lowest level since mid-February. The yen is down over 3% for the week, on pace for steepest weekly decline in a year, stoking worries of intervention from Japanese authorities. The euro fell 0.26% to $1.1628, hitting its lowest level in a month as markets braced for further political upheaval in France. France's President Emmanuel Macron faced growing pressure to resign or hold a snap parliamentary election to end political chaos that has forced the resignation of five prime ministers in less than two years. The New Zealand dollar sank nearly 1% after the central bank slashed its benchmark rate by 50 basis points and kept the door open for further easing, suggesting policymakers were worried about the frail state of the economy. Meanwhile, all three U.S. indexes ended in negative territory after a survey from the New York Federal Reserve showed deteriorating consumer expectations and rising inflation projections. Investors have had to rely on secondary, independently produced data, along with remarks from monetary policymakers, to gauge the likelihood that the Federal Reserve will implement its second rate cut of the year at this month's policy meeting. Traders are pricing in 45 basis points of easing this year. The prospect of impending rate cuts and safe haven demand has pushed gold prices higher. It rose to $4,000.96 per ounce on Wednesday, taking its gains for the year beyond 50%. Thierry Wizman, global FX & rates strategist at Macquarie Group, said gold's rally is the collective "hedge" against the prospective failure of the U.S.'s AI-driven tech boom. "A collapse of that optimistic 'vision' might trigger an inflationary resolution for the world's sovereign debt overhang, rather than a productivity-based resolution." (Editing by Sam Holmes)

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