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Japan execs' morale at record low

JAPAN'S business confidence hit a record low, a key survey showed yesterday, showing the depth of the recession in the world's second-largest economy as world leaders gather in London to tackle the global financial crisis.

Slumping global demand has halved exports and slashed production of cars and electronics in Japan, pushing it into its worst recession since World War II and leading to an atmosphere of almost uniform gloom among export-reliant manufacturers.

The Bank of Japan index gauging sentiment among major manufacturers slid to minus 58 in March, more than double the previous survey and the worst in a generation.

Underlining the corporate caution, capital expenditure figures were also the second lowest on record.

Rising unemployment and falling spending data released two days earlier already showed the worrying trend that the slump in external demand was feeding into Japan's domestic economy.

"The economy may reach a bottom in the summer but is not likely to return to previous levels of growth any time soon," said senior economist Norio Miyagawa at Shinko Research Institute.

Analysts expect Japan's economy to keep shrinking in the first half of this year, meaning a record five straight quarters of contraction. Unpopular Japanese Prime Minister Taro Aso, facing an election by October, is preparing a third stimulus package to reinvigorate the economy.

United States President Barack Obama landed in London for the G20 meeting to address the worst global economic slowdown since the 1930s, which has already cost millions of jobs and trillions of dollars in government assistance.

He arrived on his first major overseas trip as president to a slew of bad economic news and with a fight looming with Europe over whether more stimulus or tighter regulation of financial markets was the way forward.

Washington wants governments to pump more money to boost their economies but French President Nicolas Sarkozy is leading the regulatory charge.

"Failure is not an option, the world would not understand it and history would not forgive us for it," Sarkozy said.

The plight of US auto makers was not far behind Obama after Washington forced General Motors' chief executive to step aside this week and told GM and struggling Chrysler to come up with better restructuring plans or face bankruptcy.

GM warned on Tuesday there was an increasing chance it could file for bankruptcy by June as it tries to cut its debt load, with the likelihood of more factory closings and job losses, sending its shares tumbling 28 percent.


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