Dire data in Japan, Europe; Sony cuts jobs

A newspaper said Japan was considering spending US$216 billion on new stimulus measures, around 3.6 percent of Gross Domestic Product, to boost its economy.

The European Union has announced a stimulus plan totalling 200 billion euros (US$260 billion), but the data suggested more action might be needed, at least in the form of rate cuts.

British industrial output fell at its sharpest pace in nearly six years in October, and revisions to previous months' data suggested the economy might have contracted even faster in the third quarter than initially thought.

France reported a record trade deficit that reflected a Europe-wide slowdown. In Germany, the continent's engine, a survey of sentiment suggested the economy might start to emerge from recession in mid-2009 at the earliest.

The Bank of Canada unexpectedly cut its key interest rate by three-quarters of a percentage point to a 50-year low of 1.50 percent and declared the Canadian economy to be in recession.

Technology firms worldwide were feeling the pain -- Japanese electronics maker Sony Corp said it would cut 8,000 full-time staff jobs and as many part-time or contract jobs as part of efforts to save US$1.1 billion in costs.

Despite the bad news, European and Japanese shares were up around 1 percent, building on Monday's gains of up to seven percent. U.S. shares were around 0.8 percent lower.

"The data reinforces a view that there will be more reflationary measures and more rate cuts, so people are looking through the bad news as a forerunner to more good news," said Grahame Exton, investment director at Tilney fund management in London.

Japan's economy shrank 0.5 percent in the third quarter, worse than a preliminary reading of 0.1 percent, according to latest data. This put the world's second-largest economy on track for its longest contraction ever.

The Yomiuri newspaper reported, without citing sources, that the government was considering an economic package including spending of up to 20 trillion yen (US$216 billion) over 3 years.

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