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TOPWRAP 6-Japan recession deepens, China cuts rates

Tue Dec 23, 2008 1:07am IST
 
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* U.S. holds record-large 2-year Treasury note auction

* China cuts lending rate for fifth time since September

* Japan's Nov exports plunge, sentiment at all-time low

* Caterpillar, Toyota slash spending as demand fades (For full crisis coverage, click [nCRISIS])

By Tomasz Janowski and Emily Kaiser

SINGAPORE/WASHINGTON, Dec 22 (Reuters) - The United States sold a record-large amount of debt on Monday and China cut interest rates for the fifth time since mid-September as gloomy economic and corporate reports showed the world economy was stuck in a deep rut.

Japan reported its biggest-ever drop in exports in November while euro zone industrial new orders in October posted the deepest plunge on record, providing the latest evidence that demand was falling more quickly than governments can respond.

"This is a truly global recession," Merrill Lynch economist David Rosenberg said, pointing to Japan's weak export figures, which included a 34 percent drop in U.S. shipments.

The world's top carmaker, Toyota Motor Co (7203.T: Quote, Profile, Research) forecast its first-ever group operating loss -- 150 billion yen ($1.7 billion) -- due to a collapse in global demand and a crippling rise in the yen. [nT299128]  Continued...

Russian Finance Minister Alexey Kudrin poses with his G20 colleagues and central bank leaders during the family photo at the G20 Finance Ministers meeting at a hotel in St. Andrews, Scotland. REUTERS/POOL New
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