Global recession fears deepen after lacklustre G-20

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CHICAGO, Nov 17 (Reuters): A package of economic rescue measures agreed by the world's major governments appeared to fall short of calming investors jangled nerves as the trading week dawned in Asia.
In early trading on Monday, the yen and U.S. dollar rose in a flight to safety on assessments that the meeting yielded no concrete moves to avert a looming global recession.
Governments from Washington to Beijing agreed Saturday to a host of fiscal and monetary steps to rescue the global economy but it was left to individual governments to tailor their response to their particular circumstances and troubled industries.
"Taken as a whole, it does not appear that the outcome of the summit will be sufficient to stem the financial crisis. This was a high bar from the start," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman in New York.
In the United States, the lame-duck status of President George W. Bush's administration made guessing the likely ability of the Group of 20 economic summit to restore market confidence tougher.
President-elect Barack Obama sent emissaries to the weekend event, and issued a statement in support of a coordinated response to the global financial crisis.
The post-meeting statement from the grouping of major industrialised and developing countries contained a kitchen sink of reform pledges aimed at soothing volatile markets and calming consumers' worries.
It said that all financial markets, products and participants will be subject to supervision, vowed tougher accounting rules, a review of compensation practices and greater cooperation between national regulators.
Even the long-running Doha round of free-trade talks was given a new lease on life.
Canadian Prime Minister Stephen Harper termed the declaration enough to "give the markets reassurance."
Finance ministers were told to develop specific plans for implementing the recommendations. The first set of actions is to be completed by the end of March, and a follow-up meeting will be held by the end of April.
But others were skeptical.
"No concrete coordinated actions were announced that will change anyone's outlook for the world economy, inflation, exchange rates or interest rates as the markets reopen today," said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York.
AFP adds from Tokyo: Japan became the latest major country to fall into recession Monday as global economic fears deepened after a Washington summit offered markets scant hope for action to contain the damage, analysts said.
Markets showed little initial enthusiasm for a vague pledge on Saturday from Group of 20 leaders to join forces to galvanize growth and overhaul the world's financial architecture.
The G20, grouping developed and developing countries, stopped short of announcing specific steps such as coordinated stimulus spending.
"In the midst of an emergency crisis, to have a statement that reads 'We will cooperate with each another' is all but meaningless," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
"Market sentiment has soured and with all eyes back on the theme of global recession," he said.
Major European stock exchanges fell at the opening of trade, following a mixed performance in Asia, but later pared their losses. The yen strengthened as risk-averse investors, despite news of a Japanese recession, sought shelter in what they saw as a safe currency.
"The economic spillover of the financial crisis has increased and there is uncertainty about when conditions will stop getting worse," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
"Equities are struggling to rise and traders are reluctant to buy the dollar, euro and other currencies, pushing up the yen," he said.
There was no let-up in the flow of bad economic news. Official data showed Japan, the world's second largest economy, contracted 0.1 per cent in the third quarter, following Germany, Italy and Ireland into recession.
"This is not going to be a short or painless recession," warned Noriko Hama, a professor and economist at Doshisha University.
The last time Japan was in recession -- usually defined as two or more consecutive quarters of economic contraction -- was in 2001 after the Internet bubble burst.