A look at economic developments and stock-market activity around the world Thursday:
TOKYO -- The yen weakened slightly against the dollar after a dramatic surge in recent days, as Japan warned of possible intervention in the foreign exchange market and ahead of an expected rate cut by the country's central bank. The pause in the yen's climb came as Tokyo strengthened its language on the possibility of intervening to limit the currency's strength and protect Japanese exporters. Finance Minister Shoichi Nakagawa told reporters he would "implement appropriate measures" regarding the yen's gains. "For export manufacturers the acceleration of the strong yen is a negative factor," he said. The Bank of Japan, which began a two-day policy meeting on Thursday afternoon, was widely expected to cut interest rates from the current 0.30 percent, probably by half, which could also cause the yen to weaken as investors sold the currency and sought better rates elsewhere. The Nikkei 225 stock average climbed 54.71 points, or 0.6 percent, to 8,667.23.
LONDON -- British auto manufacturers stepped up pressure on Prime Minister Gordon Brown's government to deliver an industry bailout package as a report revealed that car production slumped by a third in November. The Society of Motor Manufacturers and Traders warned that crumbling domestic and export demand would lead to extended plant closures and job cuts as production falls, leaving Britain unprepared for improved economic conditions. The industry body wants the government -- which has confirmed it is in talks with Jaguar Land Rover's Indian owner about possible financial support -- to move quickly to restore demand and loosen tight credit conditions. Meanwhile, official figures showed British retail sales unexpectedly rose 0.3 percent from October to November, even as government debt hit its highest in almost a quarter century and a survey indicated half a million households will be behind in mortgage payments next year. Britain's FTSE-100 closed up 0.2 percent at 4,330.66.
FRANKFURT, Germany -- Business confidence in Europe's biggest economy fell to its lowest point in over a quarter century in December as the global economic crisis stanched near-term prospects. The Munich-based Ifo Institute said that its monthly index of German business sentiment slipped to 82.6 points in December from 85.8 points in November. It was last that low in November 1982, and has fallen more than 20 points in the last year. The survey said that the business climate for manufacturing -- a key segment of Germany's economy -- cooled considerably. Germany's DAX rose 48.02 points, or 1 percent, to 4,756.40.
BEIJING -- China cut prices for gasoline, diesel and jet fuel. The price of diesel will fall by 18 percent while the price of gasoline is cut by 13.8 percent, effective Friday, according to the country's planning agency. Jet fuel prices will fall by 32 percent. The cuts will help trucking companies, airlines, factories and others that are being squeezed by high fuel prices and a slump in sales. The price cuts come as Beijing is trying to revive falling economic growth but the announcement made no mention of a link with its stimulus measures. It said prices were cut to reflect a decline in global oil costs. The benchmark Shanghai Composite Index climbed 2 percent, or 38.87 points, to 2,015.69. Hong Kong's Hang Seng Index recovered near the end of the session to add 0.2 percent to 15,497.81.
PARIS -- Bernard Madoff's alleged $50 billion investment fraud demonstrates the absolute necessity of better regulation of financial sectors, the French prime minister said. Francois Fillon called the affair "a real scandal" and said it "clearly shows that the regulatory reform we've been calling for ... is absolutely necessary." His comments on Europe-1 radio came after France's market regulator said late Wednesday that French investors may have lost "several hundred million euros" in the scam through mutual funds with indirect exposure to Madoff's funds. The CAC-40 in France was down 0.2 percent at 3,234.15.
SEOUL, South Korea -- South Korea said it plans to establish a 20 trillion won ($15.5 billion) fund with central bank support next year to help shore up banks and encourage them to lend. The fund, set to start operations from Jan. 1, is aimed at helping lenders boost their capital adequacy ratios by purchasing certain shares and bonds, the Financial Services Commission announced. Participation is available to banks on a voluntary basis, according to the commission, which serves as South Korea's financial regulator. Meanwhile, brawling South Korean lawmakers tried to sledgehammer their way into a parliamentary meeting room barricaded by the ruling party as the National Assembly descended into chaos over a free trade agreement with the United States. Opposition parties were incensed by the ruling Grand National Party's move to submit the agreement to a committee on trade, setting in motion the process for the accord to win approval in the legislature. The opposition attempt failed, and 10 GNP legislators introduced the bill to the committee. The Kospi closed up 0.5 percent at 1,175.91.
STOCKHOLM, Sweden -- Swedish lawmakers approved a 28 billion kronor ($3.6 billion) aid package to help prevent the country's auto industry from collapsing. The plan includes 20 billion kronor in credit guarantees, 5 billion kronor in rescue loans and 3 billion kronor in research funds. It does not include options to buy troubled brands such as Ford Motor Co.'s Volvo or General Motors Corp.'s Saab. Ford has said it intends to offload Volvo, by either selling it or spinning it off into a separate company, and General Motors has said it is performing "a strategic review" of Saab.
KIEV, Ukraine -- About 1,000 angry Ukrainians rallied in the Ukrainian capital, protesting price increases, wage delays, utility cutoffs and other effects of the economic crisis gripping this ex-Soviet nation. Inflation has ravaged the economy and the hryvna has lost half its value since the global financial meltdown began in September. Adding to the tensions, Russia's state natural gas monopoly, Gazprom, warned on Thursday it will cut gas supplies to Ukraine on Jan. 1 if it fails to pay off a $2 billion gas debt.
BRUSSELS, Belgium -- Euro-zone trade swung into a surprising surplus in October, the EU statistics agency said, even as a stronger euro and tumbling demand abroad tamps down exports from the recession-hit 15-nation economy. The euro-zone reported a trade surplus of 900 million euros ($1.27 billion) in October from a year ago after posting a 4.5 billion euros ($6.36 billion) deficit in September. Euro exports of 141.2 billion euros ($199.65) were up 1 percent in October compared to the same month last year. This outpaced imports, which were up 3 percent to 140.3 billion euros ($198.37) -- bucking a general trend in which euro nations now import more than they export. Meanwhile, BayernLB, the first German bank to seek state help, won EU approval for a 10 billion euros($14.14 billion) cash injection from the German government to help it survive the financial crisis. Germany has promised to put forward a restructuring plan for the bank within four months, it said. The bank already plans to slash 5,600 jobs -- 29 percent of its staff -- by 2013 and close offices outside Germany which will help it reduce costs by euro670 million.
MOSCOW -- The ruble ratcheted downward as the Russian Central Bank again loosened its defense of the currency, which is under constant pressure from declining oil prices and increasing economic woes. The depreciation was the second in as many days, the third this week, and the eighth since Nov. 11, when the bank began backing off support of the ailing national currency. The bank manages the value of the ruble against the dollar and euro, and has sought to let it fall in value more slowly than it would have under free market conditions.
SINGAPORE -- In a news conference here, World Bank President Robert Zoellick called on Asian governments to reject raising tariffs and other trade barriers in response to the global economic slowdown. Zoellick decried the failure of the Doha round of World Trade Organization talks and urged countries to maintain open trade policies. Asian economies, most of which rely on exports to drive growth, have suffered from a fall in demand from developed countries. While most countries in the region expect to avoid recession, they've all seen growth slow this year.
MUMBAI, India -- Lower fuel prices have pushed India's inflation down sharply, the Ministry of Commerce said, as the government tried to scrape together more funds to stimulate the country's flagging economy. The wholesale price index -- India's most-watched inflation measure -- hit 6.8 percent for the week ended Dec. 6, down from 8 percent for the prior week. This time last year, inflation was just 3.8 percent.
SANTIAGO, Chile -- A six-year cycle of rapid economic growth in Latin America will come to an end next year because of the global economic slowdown, a U.N. agency predicted. The Economic Commission for Latin America and the Caribbean said growth will fall to 1.9 percent in 2009 from 4.6 percent this year. Falling international demand for Latin America's commodities is stalling economic growth in the region, according to a presentation by commission Executive Secretary Alicia Barcena. In afternoon trading, Chile's IPSA was nearly flat at 2,349, while Argentina's Merval index lost 0.7 percent to 1,140 and the Bovespa in Brazil lost 0.5 percent to 39,763. Mexico's IPC gained 1.5 percent to 22,889.
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