A look at economic developments and stock-market activity around the world Monday:
TOKYO -- Toyota Motor Corp. slashed its earnings forecast, projecting that it would report its first annual operating loss for the fiscal year through March -- its first such loss since it began reporting results in 1941. Battered by falling demand from consumers around the world and a surging yen, Toyota and other Japanese automakers have been reducing earnings outlooks and cutting workers. Toyota forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Meanwhile, the Ministry of Finance said Japanese exports plunged a record 26.7 percent in November, highlighting the drop in global consumer demand for Japanese products. Economists warned that exports such as Toyota's cars -- a mainstay of the world's second-largest economy -- would tumble further with no recovery in sight for the global economy. Even exports to the rest of Asia are falling sharply. Despite the bad news, Tokyo bucked the downward trend in Asia, Its Nikkei 225 stock average rose 135.26 points, or 1.6 percent, to 8,723.78.LONDON -- Two rate-setting members of the Bank of England indicated they favor deeper rate cuts to help the economy through the looming recession, causing a further fall in the value of the pound. The Bank of England's deputy head, John Gieve, who also sits on the bank's rate-setting committee, said the bank had been surprised by the severity of the financial crisis. The FTSE 100 index of leading British shares closed down 37.77 points, or 0.9 percent, at 4,249.16.
BERLIN -- German consumers' economic expectations for January stabilized at very low levels -- despite the economy falling into recession -- as slower inflation offset growing fears of unemployment, a survey showed Monday. The GfK research group said its forward-looking consumer climate index for January stood at 2.1 points -- flat against a revised 2.1 points in December. The part of the index measuring Germans' income expectations, however, dropped markedly after four consecutive increases -- down 8.5 points to minus 15.4. The DAX index ended down 57.68 points, or 1.2 percent, at 4,639.02.
BRUSSELS, Belgium -- The EU statistics agency, Eurostat, said that industrial orders data for the euro-zone plunged by a monthly 4.7 percent in October for a 15.1 percent year-on-year decline. Most countries posted declines, including industrial heavyweights Germany and France.
DUBLIN, Ireland -- Ireland's finance minister revealed plans for a euro5.5 billion ($7.7 billion) bailout of three leading banks -- made necessary by what he called reckless property lending during Ireland's long Celtic Tiger boom. Brian Lenihan said all three banks -- Allied Irish, Bank of Ireland and Anglo-Irish -- needed to boost their cash reserves to counter international doubts about their ability to withstand Ireland's deepening recession. Anglo-Irish Bank Corp., a specialist lender heavily exposed to the collapse of Ireland's property and construction markets, would fall under government control. Traders on the Irish Stock Exchange embraced state support for Ireland's dominant two banks, but kept questioning whether Anglo-Irish could survive.
BEIJING -- China cut interest rates for the fifth time in four months in a new effort to revive economic growth amid government anxiety about spreading job losses and worker protests. The benchmark one-year lending rate will fall by 0.27 percentage point to 2.25 percent, effective Tuesday, the central bank said. That came just four weeks after China's biggest rate cut in 11 years and left the benchmark rate at its lowest level since February 2004. Beijing is trying to prod consumers and businesses to spend in an effort to support a massive government stimulus package intended to rev up domestic economic activity and shield China from a global downturn. Manufacturing, investment and other key drivers of the economy are still weakening despite earlier rate cuts. The benchmark Shanghai Composite Index fell 1.5 percent, or 30.71 points, to 1,987.76. The blue-chip Hang Seng Index lost 505.12 points, or 3.3 percent, to finish at 14,622.39, its lowest close in more than two weeks. Since hitting its November lows, the benchmark had bounced back more than 20 percent as of Friday.
PARIS -- Michelin SCA's recent production cuts, made to adjust to sharply falling demand amid the global economic crisis, will cost euro150 million ($209 million) in the fourth quarter, the French tire maker said. Demand for tires in Europe, North America, Asia and South America fell in November as car makers slashed production in the face of a steep drop in sales. The CAC-40 fell 74.54 points, or 2.3 percent, to 3,151.36.
SEOUL, South Korea -- South Korea plans to slash 13 percent of jobs at public corporations over the next three to four years to improve efficiency and cut costs, the government. A total of 19,000 positions at South Korea's 69 public corporations will be cut over three to four years. Meanwhile, Hyundai Motor Co. and Kia Motors Corp., which dominate the South Korean car industry, cut their joint 2008 sales forecast by 12.5 percent and said they would freeze pay for managers amid slumping vehicle demand. Separately, Ssangyong Motor Co., South Korea's smallest automaker, said it may not be able to meet its December payroll on time. South Korea's Kospi dipped 0.1 percent. Singapore, Australia and mainland China benchmarks were each down over 1.5 percent.
MOSCOW -- The ruble dropped further as the Central Bank again eased its support of the Russian currency, under constant pressure from plunging oil prices and economic woes. The ruble lost 1.6 percent on the main foreign currency exchange and closed at 33.5 rubles against the bank's euro-dollar basket at the MICEX. The depreciation was the third in just four days, and the ninth since Nov. 11 when the Central Bank began backing off support of the ailing ruble. The Kremlin is anxious to avoid a repeat of the 1998 financial crisis when Russians rushed to withdraw their savings as the ruble plummeted. It has stuck to the line that it will not allow any dramatic falls in the ruble. Many economists, however, have called for a one-off full devaluation to stop the sharp drain on the country's hard currency reserves and capital outflow.
RIO DE JANEIRO, Brazil -- Brazil's Central Bank said economic growth this year should be faster than expected -- adjusting its estimate of GDP growth to 5.6 percent from 5 percent. Growth for next year is forecast at 3.2 percent. The central bank also said Monday that inflation should reach 6.2 percent this year, but only 4.7 in 2009, due partly to recently increased interest raises. The Ibovespa index was down 3.5 percent to 37,774 in midday trading.
RIYADH, Saudi Arabia -- Saudi Arabia is projected to record a budget deficit of 65 billion riyals ($17.3 billion) in fiscal 2009, its first in over five years, as the Arab economic powerhouse ratchets up efforts to support domestic growth in the face of plummeting oil prices and a global economic meltdown. In a new budget, the Ministry of Finance said government expenditures were budgeted at 475 billion riyals for fiscal 2009, and total revenues were estimated at 410 billion riyals. That contrasted sharply with fiscal 2008 projections, with the ministry forecasting 1.1 trillion riyals in revenue for that year and expenditures hitting 510 billion riyals. The country was expected to record a surplus of 590 billion riyals this year, it said.
KIEV, Ukraine -- Thousands of car drivers in the Ukrainian capital angrily blew their horns for several minutes, protesting what they call incompetent and corrupt government policies that led to a devastating financial crisis. The Ukrainian currency has lost some 40 percent of its value since September as a fall in the export of steel, the heart of the economy, led to a shortage of foreign currency. That was coupled with a loss of confidence in the hryvna and the banking system. Monday's protests, branded "Enough" and organized mainly through the Internet, were a sign of growing anger and opposition to the government which experts say could boil over into mass protests in the coming months.
BOGOTA, Colombia -- Colombia's national statistics agency says the pace of growth is slowing, with third quarter GDP growth counted at 3.1 percent above the same period a year earlier. The report shows a mere 0.7 percent rise in gross domestic product between the second and third quarters of the year. Quarterly year to year growth rates have slipped from a torrid 8.5 percent in the first quarter of 2007. The rate was down to 4.5 in the first quarter of 2008 and to 3.8 percent in the second quarter. The government says it expects overall growth of 4 percent this year, down from 8 percent in 2007.
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