Recession hits Japan, IMF needs more money

Japan became the latest major economy to fall into recession Monday with France close behind, and the IMF said it needed at least $100 billion to fight the billowing economic crisis enveloping the world.
Meanwhile, the battered auto industry came into focus. The U.S. Senate was to begin debating a bailout later in the day, Germany was to hold talks with General Motors unit Opel, and Japan's Toyota came under ratings scrutiny.
In something of a surprise, figures showed Japan, the world's second-biggest economy, sliding into its first recession in seven years in the third quarter as the financial crisis curbed demand for Japanese exports.
The 0.1 percent contraction in the world's second-largest economy in July-September was worse that consensus forecasts.
The euro zone is also in formal recession, with two consecutive quarters of contraction, Britain and the United States are on the brink and China is slowing sharply.
Britain's main employers group forecast Monday that unemployment could rise to almost 3 million by 2010 while France's central bank said that the French economy should contract 0.5 percent in the fourth quarter.
Policymakers have little doubt that their economies have not finished declining.
"We need to bear in mind that (our) economic conditions could worsen further as the U.S. and European financial crisis deepens, worries of economic downturn heighten and stock and foreign exchange markets make big swings," Japanese Economy Minister Kaoru Yosano told a news conference.
International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn told the BBC his organization was likely to need at least $100 billion in extra funding over the next six months to help countries out of the mire.
G20 LAUNDRY LIST
Financial markets continued to shudder under the joint strain of declining economies and ructions in the financial system. Oil fell more than $1 to below $56 a barrel and MSCI's main world stock index was down half a percent for a 46 percent year-to-date loss.
Leaders of the world's 20 largest economies, meeting in Washington over the weekend, agreed on a host of steps to rescue the global economy.
But they left it to individual governments to tailor their response to their own circumstances and troubled industries.
The post-meeting statement from the group of major industrialized and developing countries contained a laundry list of reform pledges aimed at soothing volatile markets and calming consumers' worries.
"This weekend's G20 summit failed to deliver any new stimulus measures to rescue the world economy from the current recession, but at least it avoided the knee-jerk responses (such as rushed regulation) that would have made things worse," Julian Jessop at Capital Economics said in a report.