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Japan’s recession deepened in November as companies cut production at the fastest pace in 55 years and rising unemployment prompted households to pare spending.

Factory output plunged 8.1 percent from October, the Trade Ministry said today in Tokyo, more than the 6.8 percent estimated by economists. The jobless rate climbed to 3.9 percent from 3.7 percent. Household spending slid 0.5 percent, a ninth drop.

Simultaneous recessions in the U.S. and Europe have weakened demand for Japan’s exports, prompting companies from Toyota Motor Corp. to Sony Corp. to idle plants and fire workers. The Bank of Japan has little room to spur the economy after cutting interest rates close to zero last week, and Prime Minister Taro Aso has yet to implement two stimulus packages.

“We’re not at the worst yet,” Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo, told Bloomberg Television. “In terms of the stimulation of the real economy, what matters is fiscal policy, not monetary policy.”

The yen traded at 90.43 per dollar as of 1:26 p.m. in Tokyo from 90.46 before the reports. The Nikkei 225 Stock Average rose 0.8 percent. The gauge has lost 43 percent this year, heading for its worst annual decline. The yield on Japan’s 10-year bond fell 2 basis points to 1.195 percent, matching a three-year low.

The decline in production was the biggest since comparable figures were first made available in February 1953. Shipments also fell the most on record. The ministry downgraded its assessment of output, saying it’s “declining rapidly.”

No End in Sight

There’s no end in sight to the recession that began when the economy shrank in the past two quarters. Companies surveyed by the ministry planned to reduce output a further 8 percent this month and 2.1 percent in January. Should December’s forecast be realized, production would slide a record 11.1 percent this quarter.

“The output numbers were just horrible,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Economic conditions are going to deteriorate rapidly.”

Fuji Heavy Industries Ltd. announced additional production cuts today. The maker of Subaru-brand cars will lower output by a further 10,000 vehicles in the year ending March, bringing total reductions to 70,000 worldwide. It will also shed 300 temporary jobs on top of 800 eliminations announced last month.

Japan’s exports plunged 26.7 percent in November, the sharpest drop since at least 1980, a report showed this week.

The Bank of Japan last week lowered its benchmark interest rate to 0.1 percent, increased purchases of government debt and announced plans to buy commercial paper for the first time.

Signs of Deflation

The inflation rate eased the most in a decade in November as prices of oil and other commodities plunged, indicating deflation may be returning to the world’s second-largest economy pay day loans. Consumer prices excluding fresh food rose 1 percent from a year earlier, the slowest pace since April, the statistics bureau said today.

“Data clearly indicate the problem for Japan is deflation, not inflation,” said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo.

Economic and Fiscal Policy Minister Kaoru Yosano said “the government, companies and politicians need to make an effort to keep the economy from falling apart next year.” Prime Minister Aso has unveiled two stimulus plans since becoming Japan’s leader in September; both await approval by parliament.

The measures “may help to ease the economy’s decline once they’re actually implemented,” Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo, said on Bloomberg Television. “But there’s still little hope that Japan’s economy will show any clear signs of a turnaround in 2009.”

Yen Pain

The yen’s 23 percent gain against the dollar this year is compounding exporters’ woes by eroding their profits. Japan’s currency surged to a 13-year high of 87.14 on Dec. 17.

Japanese carmakers have been hit by the recession in the U.S., where consumer credit is drying up and households are spending less. Toyota this week forecast its first operating loss in seven decades for the year ending March. Last month the automaker, the world’s second largest, said it would fire 3,000 temporary staff.

Temporary and part-time workers are the hardest hit by the downturn. Companies plan to fire 85,012 such staff by the end of the business year, more than double the 30,067 forecast last month, the Labor Ministry said today.

The ratio of jobs available to each applicant dropped for a 10th month in November to 0.76, extending the longest losing streak since 1998. Wages fell 1.9 percent, the most in four years, underscoring why consumer sentiment slumped to a record low.

Retail sales slid 0.9 percent from a year earlier, the biggest drop in 16 months, the Trade Ministry said today. Weaker personal spending is prompting retailers to reconsider investments.

LVMH Moet Hennessy Louis Vuitton SA last week scrapped plans to open a 12-story Tokyo store. Isetan Mitsukoshi Holdings Ltd., Japan’s largest department store, will delay renovating its two flagship outlets in Tokyo, broadcaster NHK reported last week.

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European Central Bank council member Ewald Nowotny said the bank is in a wait-and-see mode, signaling it won’t necessarily cut interest rates again next month.

“The situation is open,” Nowotny said in an interview in Wuerzburg, Germany, late on Dec. 5. “We’ll observe how things are working, what’s happening, and then we’ll see. The ECB certainly doesn’t want to be pressured by expectations.”

Investors are betting the deepening economic downturn will prompt the ECB to cut its benchmark rate by a further 50 basis points at its next meeting on Jan. 15, Eonia forward contracts show. The ECB lowered the rate by 75 points to 2.5 percent last week, the biggest reduction in its ten-year history. Still, President Jean-Claude Trichet refused to be drawn on whether it would lower borrowing costs again.

“We’ve taken this step, which was a relatively big one for the ECB, and we’ll monitor further developments,” said Nowotny, who heads Austria’s central bank. “I favor a steady-hand policy. Having said that, one should always retain the flexibility to react to new developments. There’s certainly room for maneuver if the future economic development is significantly weaker” than expected.

“The remarks point to a pause in January,” said Juergen Michels, an economist at Citigroup Inc. in London. “However, the ECB will cut rates again in February as the bank’s view on economic growth next year will turn out to be too optimistic.”

Downside Risks

The ECB last week predicted the economy will shrink about 0.5 percent next year, which would be its first full-year contraction since 1993. The 15-nation euro region is already in recession after the global financial crisis pushed up lending costs and damped demand for European exports.

“To my mind, the downside risks are probably bigger than the upside risks,” said Nowotny, 64. Still, “the ECB is rather cautious with interest-rate cuts and doesn’t want to commit hastily to anything.” Asked if the bank is in a wait-and-see mode, Nowotny said “yes.”

While the ECB expects inflation to drop below its 2 percent limit next year and stay there through 2010, it hasn’t achieved its price-stability goal since 1999. The ECB raised rates as recently has July, citing the threat of a wage-price spiral.

Trichet said last week he wants to avoid “being trapped” at interest-rate levels that are “too low fast pay day loans.”

Global Rate Cuts

The U.S. Federal Reserve has reduced its key rate by 325 points this year to 1 percent, and the Bank of England has lopped 2.5 percentage points off borrowing costs since Nov. 6, taking its main rate to 2 percent.

The ECB has lowered rates by 175 basis points since early October and flooded the banking system with additional liquidity. Nowotny suggested policy makers want to take stock before committing to further steps.

“There’s uncertainty regarding the extent to which the measures taken this quarter are starting to have an impact,” he said. “We’re in uncharted waters but we see several indications that the situation is normalizing. Money-market rates are declining, they’re moving to the right direction, even though only slowly.”

Nowotny said the ECB may look at ways to make the use of the bank’s deposit facility “less attractive” to commercial banks. Overnight deposits with the central bank have boomed as financial institutions choose to park money with the ECB rather than risk lending to others at a better rate.

Banks deposited 250.5 billion euros ($322 billion) on Dec. 5, the ECB said today. In the year to Sept. 15, deposits with the ECB averaged just 534 million euros a day.

‘More Clarity’

“If this development continues and the deposit facility continues to be used exceptionally, we’ll have to look at it,” Nowotny said. The interest-rate corridor “mustn’t necessarily be symmetrical. But first of all, we have to see how things evolve after the interest-rate cut.”

Lending between banks ran dry after Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, shattering confidence and sending borrowing costs to records. The ECB has provided banks with unlimited cash in its weekly refinancing operations to rebuild confidence in the market and revive lending.

“After the closing of the balance sheets this year we’ll hopefully have more clarity and therefore more certainty,” Nowotny said. “The ECB has acted in a very expansionary way and against this background it’s wrong to assess the ECB’s policy as restrictive.”

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U.S. stock markets were headed for a lower opening bell Friday as investors awaited the latest data on consumer spending.

Futures tied to the Standard & Poor's 500 Index fell 19 points to 943 at 7:40 a.m. Dow Jones Industrial Average futures lost 153 points to 9073. Nasdaq 100 futures retreated 30 points to 1315.

The Commerce Department is scheduled to release personal spending figures Friday. The average forecast is for a 0.2 percent decline in September. Personal incomes are forecast up by 0.1 percent freecreditreport.

European stock markets gave up ground Friday. At 7:36 a.m. the FTSE 100 Index was down 91 points, or 2 percent, to 4200 on the London Stock Exchange. The Dax Index slipped 5 points, or 0.1 percent, to 4864 on the Frankfort Stock Exchange.

Overnight, the Nikkei 225 dropped 453points, or 5 percent, to 8577 on the Tokyo Stock Exchange.

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Houston-based Waste Management Inc. on Monday withdrew its $6.73 billion bid to take over Florida trash hauler Republic Services Inc., paving the way for its planned merger with Allied Waste Industries of Phoenix.

Waste Management (NYSE:WMI) officials pointed to the current state of the financial markets in its decision.

"We believe that it would not be prudent to continue to pursue the acquisition of Republic," Waste Management CEO David Steiner said in a news release approved payday advance in seconds.

Republic (NYSE:RSG) reached a $6.2 billion takeover deal for rival Allied Waste (NYSE:AW) in June with the headquarters to be located in Phoenix.

Republic shares closed up $2 on Monday to end the day at $24.50. The 52-week high was $36.52 on Sept. 19. The 52-week low was $19.99 Oct. 10.

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Japanese Finance Minister Shoichi Nakagawa said the government may inject public money should the global credit turmoil threaten the nation's financial institutions.

“Japan started considering public fund injections just in case something happens,'' Nakagawa said in a joint briefing with Bank of Japan Governor Masaaki Shirakawa after the two met with Group of Seven counterparts in Washington today.

The global credit crisis wiped out more than $670 billion in market value from the Tokyo Stock Exchange's first section this week, depleting corporate capital and raising concern that Japan's financial institutions aren't immune from collapse. Yamato Life Insurance Co. yesterday became the first Japanese insurer in seven years to file for bankruptcy, citing a decline in the value of its securities holdings.

Nakagawa made the remarks after the G-7 issued a statement saying the member nations will “use all available tools'' to prevent the failure of financial institutions and ensure they can “raise capital from public as well as private sources.''

Nakagawa, also financial services minister, said yesterday he may revive a law that allows the government to pump public funds into regional lenders. The legislation expired in March.

Damage Limited

He and Shirakawa said the effect of the global financial crisis on Japan has been limited relative to the U.S. and Europe, where banks are shunning lending to each other for fear they will lose the money or because they need it themselves.

Japanese banks have largely recovered from the malaise of the 1990s, when the collapse of stock- and property-market bubbles left lenders with trillions of yen in bad loans. Economic and Fiscal Policy Minister Kaoru Yosano said yesterday that the banking sector hasn't weakened to the point where the law needs to be revived.

“Banks aren't in such bad shape that they require public- fund injections at this point,'' Yosano said, hours after Yamato announced it would file for bankruptcy.

Japan poured 12.4 trillion yen ($123 billion) into the nation's banks between 1998 and 2003, forcing mergers that cut the number of nationwide lenders to seven from more than 20. More than 9 trillion yen has already been repaid with the government generating a return in excess of 10 percent.

Nakagawa said he told the meeting that Japan is ready to contribute money to the International Monetary Fund's emergency lending program to help countries that could face financial difficulties as a result of the crisis.

Currency Moves

He also said the G-7 officials discussed the recent sharp movements in currencies at the meeting.

“We shared the view that excessive, disorderly movements in currencies aren't good,'' he said.

The yen posted its biggest weekly gain in a decade against the dollar as the global stock rout prompted investors to sell higher-yielding assets and pay back low-cost loans in Japan. Japan's currency surged 10.8 percent against the euro and 5.4 percent versus the dollar this month, eroding exporters' repatriated profits and making their products less competitive.

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A N.Y. judge has put a temporary hold on Wells Fargo & Co.’s proposed $15.1 billion buyout of Wachovia Corp., Citigroup announced Saturday night.

Judge Charles Ramos of the N. Y. Supreme Court has ordered Wachovia (NYSE:WB) to court on Friday. He will hold a hearing on whether the Wells deal violates Wachovia's earlier agreement to sell its banking operations to Citigroup for $2.16 billion.

Until then, his order issued stops Wachovia and Wells from consummating the deal.

The Wachovia/Citigroup deal was brokered Sept. 29 with the help of federal regulators. Citigroup (NYSE:C) says it includes an exclusivity agreement that prevents Wachovia from negotiating an acquisition by anyone else.

On Oct. 2, Wachovia announced it negotiated a deal with San Francisco-based Wells (NYSE:WFC). That calls for the sale of the entire bank holding company to Wells for $15.1 billion. The Wachovia board approved that deal last Friday.

Wells has insisted there is no bar to its deal with Citigroup, based in New York (fast cash). Now Ramos has called Wachovia into court to defend that position.

The court records were not available Sunday morning. But Citigroup says Wachovia objected to the proceedings and attempted to head off the order.

Citigroup says it is prepared to resume its negotiations to buy most of Wachovia’s assets. Some parts of the bank, such as Wachovia Securities, are not part of that deal, which involves financial guarantees from the Federal Deposit Insurance Corp. The proposed Wells deal would include no such guarantees.

Citigroup says it has been providing funds to Wachovia to preserve its liquidity since the Sept. 29 agreement. It says it was completing the requirements of the deal when Wachovia made its surprise announcement late last week.

Wachovia officials could not be reached for comment.

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The former administrator of an adult day health care center in Sacramento was sentenced Tuesday to five years probation for falsifying records to make patients appear sicker than they were so the center could collect government aid for their care.

Miron Balyasny, 57, of San Francisco, would spend six months of that time confined to his home with electronic monitoring, and must pay a $4,000 fine, the U.S. Attorney's office in Sacramento said. Balyasny entered a guilty plea March 28 to a single count of making false demands against the United States and could have been sentenced to a year in prison.

Balyasny was manager and administrator from 2001 through 2004 for Altamedix Inc., which ran an adult day health care center in Sacramento; his wife was listed as a one-third owner of Altamedix.

In that role, Balyasny prepared documents to support bills submitted for reimbursement to Medi-Cal, California's health care program for the poor. Program rules required that Altamedix could only collect reimbursement if the patients met certain medical criteria and would likely be in an institution if not for the day health care program.

Balyasny falsified records to indicate that the patients were sick, could not feed or dress themselves or couldn't walk instant payday advance. In one case in 2004, prosecutors said, Balyasny listed a patient as having senile dementia, chronic headaches, shortness of breath, chest pains and had to be supervised when walking, when none of those things were true.

Medi-Cal investigators interviewed the man and reviewed his files and found that "In fact, the patient, who had been a medic during World War II, frequently takes nature walks on his own for leisure activity," investigators said.

Altamedix was named in a civil whistle-blower suit by a physical therapist who made similar allegations of falsified records. Altamedix and its owners agreed to pay the government $450,000 to settle that case, but deny wrongdoing or liability.

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Nucor Corp. reports a 68 percent increase in second-quarter earnings to $580.8 million, or $1.94 per diluted share, up from $344.9 million, or $1.14 per diluted share, a year ago.

Sales grew 70 percent to $7.09 billion from $4.17 billion in the second quarter of 2007.

The Charlotte-based steel maker says its average sales price per ton increased 24 percent for the year. Total tons shipped grew 38 percent to 7.73 million.

Nucor (NYSE:NUE) attributes the increase in sales and earnings to acquisitions during the last 18 months, including Harris Steel Group Inc. in March 2007 and The David J. Joseph Company in February.

Nucor incurred a $214 million charge to value inventories using the last-in, first-out method of accounting cash advance cash advance flexible payments. In last year’s second quarter, the company incurred a LIFO charge of $66.5 million.

The company expects third-quarter earnings of $1.80 to $1.85 per diluted share. Nucor earned $1.29 per diluted share in the third quarter of 2007.