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Japan’s central bank on Friday kept its key interest rate unchanged at nearly zero and extended by six months an emergency loan program for disaster-hit regions.

The Bank of Japan’s nine-member policy board voted unanimously at a two-day meeting to maintain the overnight call rate target at zero to 0.1 percent.

It described the world’s No. 3 economy as “picking up” and predicted an eventual return to a moderate recovery despite concerns about the health of the global economy.

Industrial production figures last week showed that output had nearly recovered to the levels recorded before the March 11 earthquake and tsunami devastated northeastern Japan. Exports in August rose for the first time in six months. Capital investments and private consumption also show some pick up, the central bank said.

A key Bank of Japan report earlier this week offered a cautiously optimistic assessment of corporate Japan, where business confidence is improving as recovery from the March earthquake and tsunami takes hold.

To support reconstruction efforts, the central bank voted to give financial institutions in disaster areas six more months _ until the end of April 2012 _ to apply for loans through a special program.

The central bank said it would vigilantly watch the health of the U.S. economy as well as sovereign debt problems in Europe. It also questioned whether high-growth emerging economies could maintain momentum while controlling inflation.

“It is necessary to continue carefully monitoring how Japan’s economy will be affected by the uncertainty regarding the developments overseas and by the ensuing fluctuations in the foreign exchange and financial markets.”

The central bank promised to keep interest rates at virtually zero until it decides that “price stability is in sight.” Price stability for central banks usually means a stable rate of increase in prices. Japan suffers from prolonged falling prices _ also known as deflation.

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The government has sued the nation’s largest banks, along with a handful of other financial institutions and executives, for violating federal and state laws in the sale of home mortgage-backed securities.

Among the 17 institutions targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.

Home mortgage-backed securities were risky investments whose collapse after the real-estate bust helped fuel the financial crisis that erupted in late 2008.

The lawsuits were filed Friday by the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac.

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Airlines began to cancel flights and get planes out of the way as Hurricane Irene barreled toward the U.S. mainland on Thursday.

The storm will likely force hundreds of flights to be cancelled through this weekend and create delays that could ripple across the country.

Airlines said passengers could rebook those trips to many East Coast destinations, from Boston to the Carolinas, for free.

American Airlines and its American Eagle affiliate, with an extensive network in the Caribbean, canceled 126 flights on Thursday. Most were in the Bahamas and south Florida, including Miami, a jumping-off spot for flights to the Caribbean and Latin America.

Delta Air Lines reported four cancelations, and United one. Those and other airlines were watching Irene’s path before deciding how many flights to scrub and where on Friday.

Even before Irene’s arrival, unrelated thunderstorms were causing delays of up to two hours Thursday at major airports in the New York and Washington areas, according to flight-tracking service FlightAware. The service’s CEO, Daniel Baker, predicted that Irene-related cancelations would pick up Friday afternoon and become significant on Saturday. Thataeuros when the storm is expected to come ashore in North Carolina.

The airlines’ preparation reflects a new approach to dealing with big storms. In recent years, they have waived ticket-change fees and canceled flights long before storms arrive. That has helped reduce the number of travelers and flight crews who get stranded at airports. Canceling flights ahead of time keeps planes out of the path of damaging storms and lets airlines resume normal schedules more quickly after the bad weather passes.

But sheltering planes far from a storm carries risks. If the storm changes path and misses big airports, hundreds of flights will have been canceled unnecessarily.

Irene presents another challenge. Because major travel hubs such as Washington and New York are in its potential path, flights that are canceled or delayed there tend to ripple across the country.

“Most everyone expects New York to get hit, so you’re obviously not going to leave a lot of planes on the ground in New York, waiting for a problem,” said Tim Smith, a spokesman for American Airlines.

He said all the airline’s Thursday flights in the Bahamian capital of Nassau were canceled and there were delays in Miami due to heavy rain. He said the airline would track forecasts before making decisions about cancelations for Friday.

The airlines announced policies for changing trips free of the normal ticket-change charges.

Travelers on American going to 14 cities from Boston to Raleigh-Durham, N.C., could delay trips as late as Sept. 7 without penalty. Policies on Delta and United Continental were more restrictive at midday Thursday.

The offers were too late for some travelers whose long-planned trips turned soggy.

Noelia Chacon of Spain, touring the East Coast with her husband and son, were evacuated from the Smithsonian in Washington after Tuesday’s earthquake and now might limit their New York sightseeing because of Irene. Their tickets and hotel in Newark, N.J., are nonrefundable.

“We’ve had an earthquake and a hurricane so far. We’ll see what’s next,” Chacon said, as rain fogged the windows of the hotel lobby. “This is a trip we will not soon forget.”

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Tens of thousands of Israelis took to the streets nationwide on Saturday to protest rising housing prices in the largest turnout since the grass-roots demonstrations began two weeks ago.

The protests over housing costs have tapped into wider discontent among Israelis over the high cost of living and the growing gaps between rich and poor. Other protests include doctors striking over working conditions and pay, parents demonstrating against expensive child rearing costs and similar outpourings over increasing gas prices.

Thousands thronged the streets of Jerusalem, Tel Aviv and other major cities and chanted, “The people demand social justice.” Protesters waved Israeli flags and placards that read: “work 3 jobs but don’t make ends meet,” “killing ourselves to live” and “social gaps are killing us.”

Police spokesman Micky Rosenfeld said more than 100,000 people protested in 10 cities across the country from Beersheba in the south to Kiryat Shmoneh at the northern tip of the country Saturday night. Police closed major streets for the protesters to march.

The demonstrations began two weeks ago in Tel Aviv, where young activists set up a small tent encampment in a central neighborhood to draw attention to the country’s housing crunch. The protests, inspired in part by unrest in neighboring Arab countries, have continued to gain steam and show no signs of slowing.

“This is a great success; people are marching in the streets and living in the streets for the past two weeks,” Stav Shafir, one of the protest leaders, told Channel 2 TV. “Finally people are choosing to determine how they want to live. We want affordable housing, health, education and welfare.”

The weeks of popular demonstrations are becoming a headache for Prime Minister Benjamin Netanyahu with polls showing a sharp drop in his approval ratings and strong support for the protesters. Netanyahu announced a package of reforms meant to lower housing prices last week but it did little to defuse the anger.

In Jerusalem, thousands marched through the city center to the prime minister’s house.

Protesters held up signs reading, “Netanyahu go home.” The protests have brought together people from diverse background and a wide range of political views. Recent demonstrations have included marches against the prices of gasoline, boycotts of expensive cottage cheese that forced manufacturers to lower prices and lengthy strikes by social workers and doctors over pay and working conditions.

The average Israeli salary stands at about $2,500 per month, with key professions like teachers, civil servants and social workers typically earning less than $2,000 a month.

Home prices jumped some 35 percent between December 2007 and August 2010 and rental rates have also risen steadily. Rent on a modest three-bedroom apartment in central Jerusalem can cost more than $1,000 per month and costs even more in Tel Aviv.

A standard, 1,000-square-foot (100-square-meter) apartment can easily top $600,000 in metropolitan centers like Tel Aviv and Jerusalem, and $200,000 to $300,000 in second-tier areas.

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Asian stocks were mostly higher on hopes that a solution to Greece’s debt problems could be near even as talks between eurozone finance ministers broke up early Monday without an agreement.

Oil slipped below $93 a barrel while the dollar strengthened against the euro and yen.

Global stock markets were hammered for most of last week by fears that a default by Greece seemed imminent before rising Friday as hopes grew for a bailout deal. Investors fear a Greek default could set off a domino effect with other weak European economies.

Greece’s prime minister confirmed Sunday his nation was talking with world lenders about a second financial rescue package “roughly equal” to what it received last year. Meanwhile, Luxembourg Prime Minister Jean-Claude Juncker, chair of the regular meetings of the 17 eurozone finance ministers, said Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass new spending cuts and economic reforms by the end of the month.

But he said as long as parliament supports the new measures, he was certain that Greece would also get a second bailout that will keep it afloat over the coming years as it works to restore its struggling economy.

“All eyes remain on Greece,” strategists at Credit Agricole CIB wrote in a research note. They added that “news this morning that the Eurogroup’s final decision on the country’s second bailout package has been delayed until early July will result in more uncertainty filtering through markets no fax payday loan.”

Japan’s Nikkei 225 index was 0.6 percent higher at 9,406.84 while South Korea’s Kospi rose 0.3 percent to 2,038.45. Australia’s S&P/ASX 200 was 0.4 percent higher at 4,492.60 while Hong Kong’s Hang Seng index rose 0.6 percent to 21,823.18. Benchmarks in Singapore, Taiwan and New Zealand also rose while mainland Chinese shares were lower.

On Wall Street last week, the U.S. stock market eked out its first week of gains since April, helped by signs a solution to Greece’s debt problems were near.

The Dow Jones industrial average closed up 0.4 percent at 12,004.36. The Standard & Poor’s 500 index rose 0.3 percent to 1,271.50. The technology-focused Nasdaq composite index lost 0.3 percent to 2,616.48.

Oil prices fell below $93 a barrel in Asia as a stronger U.S. dollar made commodities priced in the greenback more expensive to investors spending foreign currencies.

Benchmark oil for July delivery was down 64 cents to $92.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.94, or 2 percent, to settle at $93.01 on Friday.

In London, Brent crude for August delivery was down 95 cents to $112.26 a barrel on the ICE Futures exchange.

In currencies, the euro slipped to $1.4271 from $1.4315 in late trading Friday in New York. The dollar edged up to 80.13 yen from 80.06 yen.

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The Travelers Companies Inc. says that severe weather in April and May will likely cost the company between $1 billion and $1.05 billion.

Travelers said Friday the cost estimate stems from several catastrophes including tornadoes and hail storms in the Midwest and Southeast where it had issued business and personal insurance policies. The amount is after taxes and reinsurance.

Due to the costly damages, Travelers says it will limit share repurchases to less than $250 million in the second quarter and another $400 million in excess of operating income for the second half of the year payday loan.

Its shares sank $2.03, or 3.3 percent, to $59.05 in morning trading.

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Government forces and tribal fighters exchanged gun and artillery fire in Yemen’s capital early Wednesday, sending the crackle of gunfire and resounding booms over the city in fresh fighting that killed at least 41 people. The fighting spread to new areas, with tribesmen from the powerful Hasid confederation seizing buildings in neighborhoods in the city’s south and northwest.

The urban battles over the last week have posed a new threat to President Ali Abdullah Saleh’s 33-year rule. For nearly four months, thousands of Yemenis have filled the streets daily, calling for democratic reforms and Saleh’s ouster. The mostly peaceful protests gave way last week to violence between Saleh’s security forces and fighters loyal to Sheik Sadeq al-Ahmar, head of the country’s largest tribal coalition.

Saleh’s often violent attempts to quash the protests have led the U.S. to turn away from its one-time ally, once considered a necessary partner in fighting Yemen’s active al-Qaida branch.

Secretary of State Hillary Rodham Clinton on Wednesday called Saleh’s refusal to step down “a source of great conflict” that has caused violence.

“We cannot expect this conflict to end unless President Saleh and his government move out of the way to permit the opposition and civil society to begin a transition to political and economic reform,” she told reporters in Washington.

Fighting in Sanaa raged until 5 a.m. then continued in bursts throughout the day. Witnesses said units of the elite Presidential Guard, commanded by one of Saleh’s sons, shelled the headquarters of an army brigade responsible for guarding sensitive government institutions. Army officers who have defected to the opposition said the government suspected the brigade commander was about to join forces with the movement to oust Saleh.

Opposition army officers, speaking on condition of anonymity in line with army rules, said the armored brigade commander, Brigadier-General Mohammed Khalil, was neutral and without political affiliation but had apparently angered Saleh free business cards.

A resident who lives close to the fighting and would only give his first name, Zaher, said columns of smoke and fire billowed from Khalil’s brigade headquarters and explosions could be heard.

The 41 dead included combatants from both sides of the conflict, said the medical officials, who spoke on condition of anonymity for fear of reprisals.

The fighting has engulfed the northern Hassaba neighborhood, where tribal fighters have seized a number of government ministries and buildings. Government artillery fire has heavily damaged the house of al-Ahmar, the tribal leader, and the government has cut the area’s electricity and water supplies.

The units, led by one of Saleh’s sons, and special forces wearing uniforms of government security troops attacked but failed to recapture the Hassaba administrative building from tribal gunmen.

Fighting spread to other areas of the city Wednesday, with al-Ahmar fighters seizing the office of the General Prosecutor in the city’s northwest. They were accompanied by two armored vehicles from the 1st Armored Division, whose powerful commander abandoned the president two months ago. So far, however, his troops have not participated in battles against Saleh’s security forces.

The Interior Ministry said in a statement that tribesmen had also taken over a five-story building in the Hadda neighborhood in the city’s south after clashing with the army. The area is a stronghold of Saleh supporters.

Yemen’s official news agency SABA called the tribal fighters “armed gangs,” saying that they looted supplies, furniture, documents and other things from the buildings they seized.

The fighting has caused a number of countries to close or scale back their diplomatic missions. Kuwait, Italy and Qatar have withdrawn their diplomats, and the United States has advised American civilians to leave the country.

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Russia abandoned one-time ally Moammar Gadhafi and offered Friday to mediate a deal for the Libyan leader to leave the country he has ruled for more than 40 years.

The striking proposal by a leading critic of the NATO bombing campaign reflects growing international frustration with the Libyan crisis and a desire by the Kremlin for influence in the rapidly changing Arab landscape.

With Gadhafi increasingly isolated and NATO jets intensifying their attacks, Russia may also be eyeing Libya’s oil and gas and preparing for the prospect that the lucrative Libyan market will fall into full rebel control.

Early on Saturday, two NATO air strikes shook the Libyan capital, Tripoli. It was not immediately clear what was targeted.

“He should leave,” Russian President Dmitry Medvedev said of Gadhafi. “I proposed our mediation services to my partners. Everyone thinks that would be useful.”

The proposal thrust Medvedev into the spotlight at a summit in France of Group of Eight rich nations. Talk of this year’s Arab world uprisings has dominated the summit.

Analysts question whether Russia still has any leverage over Gadhafi, and the leaders of France, Britain and Germany said there’s no point in negotiating directly with the Libyan leader himself.

“If Gadhafi makes this decision, which will be beneficial for the country and the people of Libya, then it will be possible to discuss the form of his departure, what country may accept him and on what terms, and what he may keep and what he must lose,” Medvedev told reporters.

Medvedev said he is sending envoy Mikhail Margelov to the rebel stronghold of Benghazi immediately to start negotiating, and that talks with the Libyan government could take place later. Margelov said earlier Friday that it’s necessary to negotiate with all “reasonable” representatives of the government, including Gadhafi’s sons.

In response, Libya’s deputy foreign minister, Khaled Kaim, said: “Russia is one of the traditional friends of Libya. … We don’t think that Russia will sway its position to side with NATO.”

He would not say whether Gadhafi had been informed of Medvedev’s proposal, but told reporters in Tripoli that the Libyan leader was constantly watching the news.

South African President Jacob Zuma is also using his party’s ties to Gadhafi to work out a peaceful outcome, heading to Libya on behalf of the African Union.

In Washington, U.S. State Department spokesman Mark Toner called Russian, South African and U.N. mediation efforts with Gadhafi “constructive,” but said they needed to make clear that the Libyan leader must leave power.

“I don’t know if it’s up to the international community, given what Gadhafi has done against his own people, to prepare him any kind of easy exit or some kind of golden parachute to leave Libya,” Toner told reporters.

Asked what value the mediation might then hold, Toner said the efforts could be useful “to make him or his regime see clearly the writing on the wall.”

“There’s no way out,” Toner added. “He’s no longer the legitimate leader in the eyes of the international community, in the eyes of his own people. The sooner he accepts that and moves on, the better.”

It’s unclear what exactly Gadhafi _ known as the Leader of the Revolution or Brother Leader in Libya _ could step down from. He has no constitutional executive position, but wields power by force of his personality and presence, making it difficult to guarantee that he has given up power as long as he and his sons remain in the country.

The opposition wants Gadhafi exiled. Medvedev said he wouldn’t offer Gadhafi refuge in Russia but said with a grin, “such countries could be found” that would be willing to take him in.

Russian officials have been critical of Gadhafi but also say NATO is using excessive force quick guaranteed personal loans. Russia recently held talks with representatives of both Gadhafi’s government and the rebels.

Russia often straddles the divide between the Western nations with which it shares a table in the G-8, and the Arab nations that Moscow nurtured during the Soviet era.

Moscow offered to negotiate with Saddam Hussein in Iraq in the 1990s, and is a member of the so-called Quartet negotiating for Mideast peace, alongside the United States, European Union and United Nations.

Over the past decade, the Kremlin sought to revive its influence in the Middle East and saw Gadhafi as one of its partners in the region. Libya struck multibillion dollar deals to procure Russian-made weapons, and Russia’s gas monopoly Gazprom has big investments in Libya that have been threatened by Gadhafi’s attacks on rebel forces.

Medvedev discussed the mediation offer with President Barack Obama at talks on the sidelines of the G-8.

“The Russians of course have long-standing relationships in Libya that frankly we don’t have,” U.S. deputy national security adviser Ben Rhodes said Friday. “We are going to be in close touch with the Russians as they pursue their conversations with the Libyans.”

A Libyan rebel spokesman, Abdel-Hafidh Ghoga, said Russia’s offer should have come sooner. “It’s too late, and it’s not a big deal,” Ghoga, the vice chairman of the opposition National Transitional Council, told a rally in the eastern city of Benghazi.

But the timing may be propitious.

Libya’s rebels have consolidated their position, and NATO pounded Tripoli with its heaviest strikes yet this week. Fuel and food shortages in the capital are starting to take a toll.

“The world does not see (Gadhafi) as the Libyan leader, and this is the position of not only the G-8 but also of all the African states that attended today’s summit,” Medvedev said.

A Moscow-based Middle East expert expressed doubt that Gadhafi will agree to step down after Benghazi-based opposition leaders rejected a cease-fire agreement proposed by the African Union in late March.

Gadhafi “will fight to the end with unpredictable consequences for everyone involved,” Yevgeny Satanovsky, head of the Moscow-based Middle East Institute, told The Associated Press.

On Friday, rebel fighters clashed with government forces to the south and west of the insurgent-held city of Misrata. Dr. Mustafa Omar of Hikma hospital said five rebels were killed and 26 wounded. It was unclear if any government soldiers were killed.

While rebel fighters have pushed Gadhafi’s troops to Misrata’s outskirts, the city, Libya’s third largest, has been under siege for months, receiving food and medical supplies only by sea.

French President Nicolas Sarkozy, hosting the G-8 summit, said Friday there is “great unanimity” about an “intensification of the military intervention” to protect civilians.

He did not say how, but France and Britain said this week they are ready to deploy attack helicopters in the campaign.

British Prime Minister David Cameron told reporters in Deauville that the deployment of helicopters was “part of the process of turning up the pressure” on Gadhafi. He said the campaign is entering a “new phase.”

So far, the NATO campaign has relied largely on strike jets dropping munitions from an altitude of about 15,000 feet (4,600 meters). The helicopters, flying much lower and slower, could more accurately identify targets in densely populated areas while risking fewer civilian lives. But such flights would also expose the helicopter crews to greater risks.

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The next few weeks will determine if the eurozone, one of the most ambitious and hopeful creations in history, can survive the year.

The 17-member currency union, which began jubilantly on Jan. 1, 1999, has lately been tested by severe recession and the prospect of sovereign-debt defaults.

Peter Bofinger, one of the German government