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Japan’s economy may shrink at an annual 6.5 percent pace this quarter, Bank of America Corp. said after reports last week showed industrial production and exports posted the biggest declines on record.

Gross domestic product in the three months ending Dec. 31 will decline more than the 2.7 percent previously predicted, said Tomoko Fujii, head of Japan economics and strategy at Bank of America in Tokyo.

Companies from Toyota Motor Corp. to Sony Corp. idled plants and fired workers this quarter as recessions in the U.S. and Europe caused sales of cars and televisions to collapse. The global slump is spreading to developing markets including Asia, the destination for about half of Japanese exports.

“External demand has vanished all of a sudden,” said Fujii. “Almost every industrialized nation is in a recession. Even in China, growth is slowing sharply.”

A 6.5 percent annualized contraction would be the steepest since the first quarter of 1998, when the Asian financial crisis and a sales-tax increase led to a 7.5 percent decline. The world’s second-largest economy shrank in each of the past two quarters, entering the first recession since 2001 no teletrak payday loan.

Factory output plunged 8.1 percent in November from October, the most since comparable data were first kept 55 years ago. Exports slid an unprecedented 26.7 percent from a year earlier.

Consumers at home are unlikely to pick up the slack. Household confidence is at a record low and the government has indicated it doesn’t plan to add to two stimulus packages it has yet to implement.

“Japan needs further economic measures as demand from abroad is totally lacking and will probably decline further in the first quarter,” Fujii said.

Finance Minister Shoichi Nakagawa told the Financial Times that the government has no immediate plans to draft another stimulus, saying its priority is to carry out measures announced since October. The plans, which include spending about 10 trillion yen ($110 billion) on employment and aid for households, still await parliamentary approval.

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Belgian business confidence declined to a record low in December as the global financial crisis pushed Europe’s economy deeper into a recession.

The confidence index for Belgium, whose government is reeling from a crisis surrounding the state-organized breakup of Fortis, plunged to minus 31.3 from minus 23.7 in November, the Brussels-based National Bank of Belgium said today in an e-mailed statement. That is the lowest since the data were first collated in 1980. Economists expected a decline to minus 26, according to the median of 19 estimates in a Bloomberg News survey.

Business and consumer confidence across Europe is tumbling as the financial turmoil saps demand for exports and unemployment rises. In Belgium, where the prime minister offered to resign over allegations his government tried to interfere with a court ruling on the Fortis breakup, the economy is forecast to shrink in 2009 for the first time in 16 years, the central bank said this month.

Confidence in Europe is “at a record low already. How deep, how low can you go?” Carsten Brzeski, an economist at ING Group in Brussels, said on Bloomberg Television today. “Unfortunately, there is some scope to see a further deterioration.”

European executive and consumer confidence in the economic outlook has dropped to a 15-year low even after interest-rate cuts and government stimulus measures aimed at battling the impact of the financial crisis health insurance. Executive sentiment in Germany, the region’s largest economy, slumped to the lowest level in more than a quarter-century in December, data showed last week.

Slowest Pace

Belgium’s economy grew at the slowest pace in five years in the third quarter and the drop in business confidence indicates the slump will extend into 2009. Gross domestic product will contract 0.2 percent next year after growing 1.4 percent this year, the central bank forecast on Dec. 8, revising a June forecast for 2009 expansion of 1.5 percent.

The Belgian king is working to name a new prime minister by Christmas after Yves Leterme tendered his resignation Dec. 19, with the fate of Fortis, formerly the nation’s largest financial- services firm, hanging in the balance. Leterme yesterday ruled himself out as the leader of a new government.

Leterme’s coalition collapsed after the Justice minister quit because the nation’s highest appeals court didn’t clear him from allegations of interfering with a ruling that blocked the sale of Fortis assets to BNP Paribas SA.

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Bank of England policy makers voted unanimously to cut the benchmark interest rate to 2 percent this month and refrained from a bigger reduction on concern it may prompt about an “excessive” drop in the pound.

The Monetary Policy Committee, led by Governor Mervyn King, voted 9-0 to bring the rate to the lowest since 1951, minutes of the Dec. 4 decision published in London today show. While the economic outlook had worsened, a cut of more than one point may push the currency down too far and “undermine confidence in the economy more widely,” the minutes said.

The pound dropped to a record low against the euro after data showed unemployment rose in November at the fastest pace since 1991. King has signaled that the bank will cut the interest rate further if needed and the U.S. Federal Reserve yesterday lowered its rate close to zero.

“Given the significant probability of undershooting the inflation target in the medium term, a cut of at least 100 basis points was needed,” the minutes said. A larger reduction “might be justified by the scale of the downside risks to inflation.”

The number of people receiving jobless benefits rose 75,700 to 1.07 million, the highest level since July 2000, the Office for National Statistics said today in London. Economists had expected a gain of 44,000, according to the median of 27 forecasts in a Bloomberg News survey.

Prime Minister Gordon Brown today pledged 158 million pounds ($245 million) to help people who recently lost their jobs and said the U.K. government will do everything it can to help soften the blow of the recession.

Rate Forecast

The main U.K. lending rate has dropped 3 percentage points since October. The rate will drop another half-point to 1.5 percent at the next decision on Jan. 8, the median of 23 economists’ predictions in a Bloomberg News survey shows.

“It’s pretty clear that the MPC thinks that the general stance of policy remains out of kilter with prospects for the economy,” said Philip Shaw, chief economist at Investec Securities in London. “Rates will fall below 1 percent in the spring. The momentum of sterling means it’s vulnerable.”

The pound dropped to 91 pence per euro for the first time today, and has fallen more than 24 percent this year. The depreciation “should act to support net export growth,” policy makers said in the minutes payday loans for bad credit.

“Financial markets had priced in a cut of 100 basis points,” the minutes said. “There was a risk that going further could cause an excessive fall in the exchange rate.”

Fed Decision

The Fed lowered its rate to 0.25 percent from 1 percent yesterday and said it will use “all available tools” to generate a resumption in growth. European Central Bank President Jean-Claude Trichet signaled that further interest-rate reductions may be limited after a cut to 2.5 percent on Dec. 4.

“The monetary authorities have got to be aggressive,” former policy maker Charles Goodhart, now a professor at the London School of Economics and Political Science, said in a Bloomberg Radio interview to be broadcast today. He said King should approach next year with “courage, flexibility and perhaps going a bit too far with the very serious occasion we’re in.”

More to Do

U.K. policy makers said that more needs to be done to unfreeze lending between banks.

“The committee agreed that bank rate was not the right policy instrument to tackle supply constraints in the credit market,” the minutes said. “Further measures to underpin lending growth would be needed, building on the government’s package announced in October to recapitalize and guarantee funding to the banks.”

Brown last month cut sales tax to 15 percent from 17.5 percent as part of a stimulus package for the economy. King said yesterday that will further depress prices after the U.K. inflation rate fell to 4.1 percent in November from 4.5 percent the previous month. The bank aims to keep annual price gains at 2 percent.

The U.K. economy shrank 0.5 percent in the third quarter, and the central bank last month predicted it would contract through most of next year. Policy makers said at the decision that surveys signaled further drops in gross domestic product in the fourth quarter and the first three months of 2009.

“The committee agreed that a significant margin of spare capacity would open up over the next couple of years,” the minutes said. “It was most likely that, without further policy action, inflation would substantially undershoot the target in the medium term.”

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Federal Finance Minister Jim Flaherty said Monday that no specific action by any one government can make the global economic crisis disappear but that Canada will continue to do its part.

Flaherty, who spoke to reporters after an event in Toronto, said Canada's government will continue to fulfill its obligations to stimulate its economy under an agreement by the Group of Seven most industrialized nations to try to reinvigorate the world economy.

He also said he has received input from the opposition Bloc Québécois about the budget he is preparing, but has not received proposals from the Liberals or the New Democratic Party, the two other opposition parties fast pay day loans. During a political crisis last week that threatened to bring down the Conservative government, the government asked the opposition for ideas on stimulating the economy.

The three opposition parties recently signed a coalition agreement that has the potential to topple the Conservatives from power.

But the government managed to win a rare suspension of Parliament last week and avoided being ousted by the coalition, which said the government's economic plan is inadequate.

Flaherty is scheduled to deliver a budget on Jan. 27.

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European services shrank at a record pace in November, increasing pressure on the European Central Bank to cut interest rates further this week.

Royal Bank of Scotland Group Plc’s services index dropped to 42.5 from 45.8 in October, remaining below the expansion- threshold of 50 for a sixth straight month. The final reading is the lowest in the survey’s 10-year history and falls short of an initial estimate of 43.3 published Nov. 21. Economists forecast a decline to 43.3, according to the median of 31 estimates in a Bloomberg survey. The index is based on a survey of purchasing managers by Markit Economics in London.

Europe’s economy fell into its first recession in 15 years in the third quarter after the worst financial crisis since the Great Depression pushed up borrowing costs, eroded confidence and hurt demand for exports. Slowing inflation is giving the ECB room to cut rates further as policy makers across the globe seek to limit the economic damage from the financial turmoil online payday loans.

“The extremely weak November service-sector purchasing managers’ survey exerts significant extra late pressure on the ECB to deliver a deep interest-rate cut on Thursday,” said Howard Archer, chief European economist at IHS Global Insight in London.

The ECB has cut its benchmark rate by 100 basis points, or a full percentage point, to 3.25 percent since early October and signaled more reductions are ahead. The central bank will probably cut its key rate by half a percentage point this week, a survey of economists shows. That would be the third reduction since early October.

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Oil prices fell over 6 per cent Monday, to below US$51 a barrel, after OPEC decided not to cut production at an informal meeting in Cairo on Saturday and on more evidence the global economic slowdown will hurt demand for crude.

By midday in Europe, light, sweet crude for January delivery was down $3.62 to $50.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract had settled down a penny at $54.43 on Friday.

In London, January Brent crude fell $3.31 to $50.18 on the ICE Futures exchange.

On Saturday, Saudi Oil Minister Ali Naimi said that OPEC will "do what needs to be done" to shore up falling oil prices when the group meets Dec. 17 in Algeria, but for now it was "too early" to make another output cut.

Prices continued to slide despite a separate report by Iranian state TV in which OPEC Secretary-General Abdullah El-Badri said that a daily oil production cut of between 1 million and 1.5 million barrels was likely in December.

OPEC had already made an output cut of 1.5 million barrels a day in October, although analysts said the organization may want to observe the impact of that cut before committing to the another one.

El-Badri was quoted Monday on the station's website saying that the Organization of Petroleum Exporting Countries is facing a very difficult situation and plans to "restore oil prices to $90 per barrel."

But disheartening news from some of the world's largest economies pushed aside speculation about any future OPEC cuts.

Surveys of activity in the manufacturing sector in the euro zone and Britain were particularly poor on Monday. Both pointed to a sharper-than-expected contraction in output.

In China, an equivalent survey of its manufacturing sector also made for grim reading, generating fears that one of the main engines of global growth over the last few years is slowing sharply same day payday loans.

Sucden Research in London cited data from the United Nations, which now expects the global economy to grow by just 1 per cent in 2009, compared to an earlier forecast expecting growth of 2.5 per cent.

Meanwhile, Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.

"They need to cut a lot to get the price to $75," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Demand is disappearing underneath them fast."

Iranian Oil Minister Gholam Hossein Nozari was quoted as saying Sunday that the market was oversupplied by around 2 million barrels per day and that production should be cut by that amount.

OPEC, which accounts for about 40 per cent of global supply, reduced output quotas in October by 1.5 million barrels a day.

"It will be difficult to get everyone to comply to a drastic cut," Shum said. "The market has assumed there will be a substantial OPEC cut so if they don't, there will be significant downward pressure on prices.''

Investors will be looking this week for signs of how bad the global economic slowdown may be, particularly U.S. retail sales at the start of the holiday shopping season.

In other Nymex trading, gasoline futures fell 5.16 cents to $1.1580 a gallon. Heating oil dropped 5.66 cents to $1.6705 a gallon while natural gas for January delivery shed 12.8 cents to $6.382 per 1,000 cubic feet.

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Naysayers who predicted the U.S. dollar’s demise as the world reserve currency of choice have been silent of late given the greenback’s meteoric recovery in recent months.

Slammed over the last several years as U.S. government budget and trade deficits mounted, the greenback was seen ceding its status as the predominant currency to the euro.

Talk of nations reducing their dollar reserves in favor of the euro prompted talk the dollar would also lose favor as the medium of exchange for commodities.

However, the global financial crisis that has rocked markets worldwide has seen investors voting with their cash and buying U.S. dollars, indicating that reports of the greenback’s death as a reserve currency have been greatly exaggerated.

“Talk of the euro replacing the dollar is off the table,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon. “The U.S. has the only economy in the world that supports a strong currency by policy and is an anchor for the global economy.”

The current credit freeze has its roots in the U.S. subprime mortgage market where overzealous lending in exotic debt products has led to a wave of homeowner loan defaults and problems with repackaged mortgage securities.

But the crisis went global when holders of those mortgage securities faced huge losses and became reluctant to take on additional risk through either lending themselves or buying more securities.

Investors then were quick to understand that the United States was the only nation with the political will to act quickly and the government and private sector infrastructure in place to implement policies http://paydayintime.com. The pockets of the U.S. tax payer to fund a bailout added to the allure of the U.S. currency.

“The United States continues to be the only entity sufficiently large and coordinated enough to deal with the multiple issues surrounding the credit crisis,” said Andrew B. Busch, global FX strategist BMO Capital Markets in Chicago. “It clearly is not over.”

The dollar’s value against major currencies had changed little in the first half of 2008, after a six year slide, but since mid-July when the magnitude of the credit crisis became apparent, the dollar has rebounded significantly.

The Intercontinental Exchange’s U.S. dollar index <.DXY has climbed 21.3 percent since that time, roughly corresponding to a 21.8 percent drop by the euro against the greenback.

The British pound has dropped 23 percent while the Australian dollar plunged 37.5 percent against the U.S. dollar.

Emerging market currencies have been particularly hard-hit as investors fled risk and repatriated funds either home or to the safety of the U.S. dollar.

Latin American-focused funds suffered their 20th straight week of outflows, EPFR Global data showed on Friday, losing a net $134.8 million to redemptions. Europe, Middle East and Africa funds had outflows of $189.1 million.

The U.S. dollar has gained 27 percent against the South African rand since mid-July and 21 percent against the Turkish lira. 

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Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) said delivery of its new 787 Dreamliner to China probably would be delayed, but the ongoing strike made it impossible to say when passengers would be able to ride in the ultra modern plane.

The company’s latest quarterly profit fell 38 percent as a seven-week strike by its jetliner assembly workers wiped out almost a month of production at its Seattle-area plants.

Boeing has orders for nearly 900 of the fuel-efficient Dreamliner, 60 of which are from Chinese airlines. The planes were to have been delivered to the Chinese airlines starting in the third quarter of next year.

“Because of the strike that is ongoing at Boeing there will probably be some delay to that,” John Bruns, a vice president of China operations, told Reuters in an interview.

“But, we just don’t know the impact yet,” he said check cash advance.

Industry analysts had expected another delay to the plane, which is already at least 16 months behind schedule.

Boeing and union officials were scheduled to resume talks with the help of a federal mediator on Thursday, but they have so far struggled to find common ground on the key issue of outsourcing.

China is a focus for Boeing and rival EADS’ (EAD.PA: Quote, Profile, Research, Stock Buzz) Airbus unit as its booming economy is expected to require another 3,400 long-haul planes over the next 20 years, and as a base of production for key parts such as rudders, fairing panels and other composite parts. 

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Nokia, the world’s top mobile phone maker, launched its free music package on Thursday, issuing a challenge to Apple Inc’s dominance of the digital music market.

The Finnish firm also launched its first touch-screen phone 5800 Xpressmusic to rival Apple’s popular iPhone.

Nokia said at an analyst and media event in London it would start selling the phone shortly, pricing it at 279 euros ($395) excluding subsidies and taxes, which it said was roughly half the price of the other main touch-screen phones on the market.

The price means consumers on many large markets will get the phone for free from operators when signing up for contract.

“The price and positioning of the product may result in substantial demand and will undoubtedly put some pressure on Apple,” said Ben Wood, research head at CCS Insight.

Nokia said all major music labels and most independent labels will offer their tracks as part of Nokia’s ‘free’ music bundle “Comes with Music.”

“Comes with Music” and similar products from other hardware vendors could help the music industry make up for falling CD sales and cut illegal downloads.

The battle for mobile music is increasingly crowded cash advance usa. Sony Ericsson launched its music package this month in Sweden, and South Korea’s LG Electronics plans a service similar to Nokia’s. 

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Bank rescues spread in Europe on Tuesday and President George W. Bush gave assurances that a $700 billion bailout plan for the financial sector was not dead, giving markets around the world a boost.

The House of Representatives rejected the bailout plan on Monday, sending stocks to their biggest percentage decline in 20 years.

Bush, Treasury Secretary Henry Paulson and congressional leaders pledged to continue negotiations, but the earliest that Congress could start work would be Wednesday.

“There’s an overarching belief that at some point this week, whether it’s Wednesday or Thursday, we’ll get something passed by the House,” said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

Without the bailout plan, which would allow the Treasury to buy toxic mortgage-related assets from banks, credit markets around the world could remain frozen, which could lead to a recession.

“I assure our citizens and citizens around the world that this is not the end of the legislative process,” Bush said before the stock market opened.

The White House said Bush had “constructive” talks with presidential candidates Sen cash advance. John McCain, a Republican, and Sen. Barack Obama, a Democrat, on Tuesday. Both candidates have urged their fellow members of Congress to pass the bailout package, which has overshadowed their campaign for the November 4 election.

Ireland unveiled a blanket guarantee for savings held by its banks, covering up to 400 billion euros ($575 billion) in liabilities, sending Irish bank stocks roaring up against a weaker sector trend. 

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