World financial crisis

Eight thousand jobs to go in Japan and record unemployment in Spain

Article published on the 2009-01-08 Latest update 2009-01-09 13:08 TU

Japanese Finance Minister Shoichi Nakagawa.
(Photo: Reuters)

The world financial crisis continues to take its toll in countries across the globe, as new job cuts are announced, stock markets fall and banks scramble to deal with recession.

In an interview on Thursday, European Central Bank president Jean-Claude Trichet added to speculation that it would again cut interest rates in the eurozone.

“What strikes me is that the most recent projections are also the most pessimistic,” said Trichet.

His comments came as inflation dropped to the lowest level in two years and manufacturing activity hit an all-time low across Europe.

In Germany, Europe’s biggest economy, Commerzbank launched a bond issue on Thursday in order to secure fresh funds.

As the second largest bank in Germany, it released more than one billion euros in state-backed three-year bonds.

This comes after eight billion euros was given to the bank in November as part of a government plan to rescue the banking sector.

Over in Ireland, one of the first EU countries to officially enter recession, computer manufacturer Dell has said that it is going to move its production facilities from their factory in Limerick to their base in Poland.

The company, Ireland’s biggest exporter, has felt the effects of the world financial crisis and is trying to match its production with market demand.

It said that although 1,900 jobs will go, it will continue with its other operations elsewhere in the country.

Across the Irish Sea, as UK's Serious Fraud Office begins to investigate the operations of alleged US Ponzi scheme fraudster Bernard Madoff, more job cuts are announced in Britain.

Retailer Zavvi announced the closure of 22 stores, while Marks and Spencer is cutting 1,230 jobs and closing 27 shops.

Elsewhere in Europe, unemployment in Spain has reached a 12-year high of more than three million.

The Labour Ministry announced that over the last year the number of unemployed has risen by more than 46 per cent, with the construction industry being hit particularly hard.

Unemployment in Spain is the highest across the EU, with the jobless rate reaching 13 per cent in November.

In Asia, stock markets across the region were down on Thursday as traders followed Wall Street’s lead.

After US shares fell by almost three per cent, Tokyo's stock exchange dropped four per cent, Taipei lost more than five per cent, while Shanghai, Singapore and Sydney all lost more than two per cent.

Japanese electronics company TDK decided to cut more than 8,000 jobs and close four factories.

And Japan’s central bank announced ten billion euros for financial organisations to help lending and stabilise credit markets.

The interest rate in Japan was cut to 0.1 per cent in December, leaving it few options to tackle the global credit crunch.