Japan warns of longer slump

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Tokyo, November 18:: joining the euro zone in recession based on the popular definition of two consecutive quarters of falling gross domestic product.

A G20 meeting at the weekend in Washington failed to come up with new measures to tackle the crisis, agreeing on broad steps but leaving it up to each country to tailor their own response. Markets were unimpressed, with stock markets around the world falling on Monday and Asian bourses dropping again on Tuesday.

Dealers said stocks were shaken by Citigroup's announcement that it was cutting 15 per cent of its workforce. HSBC said it was shedding 500 jobs in Asia, mostly in Hong Kong.

In Australia, Macquarie said its first half profit fell 43 per cent and it had written off $750 million from assets, but its shares surged as much as 26 per cent after it doused fears that it would have to raise capital.

"It's a relief," said Leigh Gardner, head of distribution at ABN AMRO. "There'd been some concern about an equity raising in the profit announcement today."

The crisis has spread well beyond banks, with US automakers facing collapse. The proposal by Senate Democrats to extend $25 billion in loans is opposed by Republicans who want to ensure any bailout package forces the industry to improve efficiency.