Kiyohiko Nishimura’s popularity with Japanese women is probably at a low ebb right now. On July 2, the Bank of Japan («www.businessweek.com») policy board member compared Japan’s growing ranks of female investors to the infamous gnomes of Zurich. That’s a reference to comments made in 1964 by Harold Wilson, a British politician, attacking Swiss bankers for pushing down the value of the British pound in the foreign exchange markets.

The charge against Japanese retail investors, including yield-seeking housewives, is that their investment in high-return overseas assets is weighing down the yen, which is currently hovering near a 22-year trade-weighted low against other currencies. “The gnomes of Zurich were accused in their day of destabilizing markets,” Nishimura said in a speech in Washington. “The housewives of Tokyo are apparently acting to stabilize them.”

Nishimura added that Japan’s ultra-low interest rates—a key benchmark rate is 0.5%—are a big factor in why so many of Japan’s retail investors are sending funds overseas, and why, in turn, rates shouldn’t be held down too much longer. “To stand pat for a long period of time is not a prudent strategy,” he added. Yet on July 12, Nishimura and his BOJ colleagues did in fact hold Japan’s key interest rate at 0.5% for the fifth consecutive month. So a sustained appreciation of the yen and a dampened Japanese interest in foreign assets look unlikely in the near future. Global Effects Expected

On the contrary, most economists and traders foresee further yen weakness. “It is natural for the yen to remain weak when the [Japanese] interest rate remains low compared to other economies,” says Masaaki Kanno, chief economist at JPMorgan («www.businessweek.com») in Tokyo, speaking before today’s decision “Everyone, including the housewives in Tokyo, expect the yen to weaken.”

Indeed, that widespread expectation is creating headaches for Japan Inc., which so far had been happy to soak up higher earnings made when bringing overseas profits back to Japan. “In the longer term, the weak yen will have side effects on global strategies,” says Yasuhiro Matsumoto, an analyst at «investing.businessweek.com» in Tokyo.

One example, says Matsumoto, is that automakers could delay opening new plants overseas because it’s cheaper to export from Japan. But that raises the risk of political reprisals in overseas markets in the future. There’s also a risk that easy profits breed complacency. “The yen’s current weakness makes it too easy for us,” «investing.businessweek.com» Chairman Masahiro Sakane said in late April. Sophisticated Overseas Investing

But why is the yen still looking like a one-way bet? It’s not just low rates in Japan. One problem is that other central banks are tightening monetary policy more quickly than the BOJ. In Britain, the Bank of England has raised its overnight lending rate by 0.25% five times in the last year.

In New Zealand, another big target for Japanese investors, benchmark rates are now at 8%—a full 7.5% higher than Japan’s rate. The European Central Bank is also expected to raise the euro interest rate again in the coming months. And while the Federal Reserve has kept U.S. benchmark rates at 5.25% for eight months, it remains considerably higher than the yen rate.

Another factor is the sheer determination, and increasing sophistication, of Japanese retail investors. Seeking higher yields overseas often means buying foreign stocks and investment trusts. Many investors, though, are favoring leveraged currency investments, contributing to yen weakness.

On July 6, Bloomberg News reported that bets against Japan’s currency by individual investors using borrowed funds exceeded those of traders on the Chicago Mercantile Exchange.

Six years after Italian police officers smashed their way into a Genoa school and beat up G8 summit demonstrators, including six British citizens, prosecutors have presented evidence that those detained after the raid were tricked out of their right to contact families or embassies.

Prosecutors in the trial of 29 policemen accused of assault on the night of July 21 2001 allege that forms given to arrested demonstrators to sign were in Italian and waived the right to contact the outside world.

One Briton, Nicola Doherty, was held for five days in a military barracks despite suffering a broken wrist from the beating she says she received at the school.

“Nicola was forced to sign this form and did not know she had waived her right to contact the outside world while, outside, UK diplomats and her family were denied access,” said Matt Foot, a British lawyer who is representing her in the trial of the policemen, which started in 2005.

The trial adjourned for a summer recess yesterday as another accusation emerged in the UK.

Mark Covell, a UK journalist who went into a coma as a result of the beating he received outside the school, has alleged that photos supplied by the Italian police were doctored to put distance between his inert body and Francesco Gratteri, Italy’s current anti-terrorism chief.

“The photos purportedly show the bearded Gratteri 50 metres away from me,” Covell said. “But it looks like the image of someone else who has had a beard electronically painted on him. In other frames you see the same man with no beard.”

Covell claims alternative footage shows Mr Gratteri was actually standing beside him as police broke his teeth, ribs and fingers, and damaged his spine and lungs.

“If we can use this footage we can show that Gratteri was close enough to stop the assault on myself and I therefore hope to start … proceedings against him in Italy.”

Italian police already face charges of planting molotov cocktails in the school to justify the raid, while Michelangelo Fournier, former deputy chief of Rome’s flying squad, admitted last month that “harmless people” were beaten.

THE chairmen of Australia’s biggest companies raked in a 24 per cent pay rise last year, according to a report from accountants PricewaterhouseCoopers.

The report found the base fee for chairmen of the ASX top 50 companies rose to $409,000 last year, up from $331,000 in 2005.

But their counterparts in the other big companies did not do too badly either.

The chairmen of the ASX top 51-100 companies enjoyed an 18 per cent pay rise to a median of $275,000.

Directors’ fees in ASX top 50 companies rose 12 per cent to a median of $140,000, a $15,000 pay rise on the previous year.

Directors in the ASX top 51-100 companies enjoyed a 14 per cent pay rise to $106,300, up from $93,500.

According to the report, the pay rises were the result of “greater responsibility, increased risks and expected time commitment”.

On the matter of executive pay, the PricewaterhouseCoopers report has recommendations that could send it soaring even further.

It says listed companies should look at incorporating some of the pay schemes used by private equity firms, which have been criticised for having a short to, at best, medium-term focus.

According to PricewaterhouseCoopers, private equity firms had shown the market that share-based ownership works by aligning executive interests with those of shareholders.

“The private equity model is not perfect,” the report says.

“However, given the trend from public to private companies is just beginning, as well as the large amount of private equity capital that needs to be invested, listed companies may do well to consider whether there are any reward and performance lessons that can be learned from private equity-owned companies in relation to measuring and driving business performance.”

On the matter of non-executive directors’ pay, the PricewaterhouseCoopers report is broadly in line with findings from proxy voting adviser ISS Australia, which earlier this year revealed that the average fee of a non-executive director of an S&P/ASX 100 company has risen 81 per cent since 2001.

ISS Australia vice-president Dean Paatsch said that supply, a buoyant market and demand, and the phasing out of director retirement payments, had driven the pay increases for directors.

But he said questions would be raised if companies wanted another big increase for directors fees.

“That adjustment has been made and with any increase from now at the same point, you would have to have a fairly compelling reason,” Mr Paatsch said yesterday.