Tokyo - Japan's industrial output in August logged a 3.5-per cent fall, the first in two months, the government said Tuesday.

It is the sharpest fall since the index logged a 4.3-per-cent decline in January 2001 under the current statistical format, the Ministry of Economy, Trade and Industry said in a preliminary report.

The fall was significantly lower than predicted by analysts, who expected a 2.4-per-cent decline and also lower than a
1.3-per-cent rise in July.

Washington - A massive government rescue of the US financial system failed in Congress amid both doubts that Wall Street's dire straits would affect the lives of ordinary Americans, and outrage in any case that taxpayers should bail out corporate titans.

Government officials and congressional leaders from both parties warned that, however distasteful, it would take an unprecedented government intervention in the financial sector to keep the US economy afloat.

Paris - As evidence grew that the US finance crisis had reached Europe, French shares fell sharply in early trading on Monday, with banking shares leading the decline.

After one hour of trading on Monday, the Paris Bourse's benchmark CAC 40 was down 3.17 per cent, at 4,031.27, with slumping issues outpacing winners by 12 to 1.

The Franco-Belgian financial services group Dexia was the biggest loser, giving up nearly one-fourth of its value, as the Belgian government declared that it would come to its support as it had with the Fortis financial group.

Hong Kong - Hong Kong officials Monday welcomed the bailout deal for the US economy but questioned whether the 700 billion US dollars in the package will be enough to revive global money markets.

Hong Kong's financial secretary John Tsang said he hoped the rescue package could be implemented quickly so that it would stabilize not only the US economy but the global financial system.

Hong Kong Monetary Authority chief executive Joseph Yam said the plan would reduce the danger of further failures of financial institutions in the US.

Sydney - The 700-billion-US-dollar bailout package being thrashed out in the US Congress is more likely to reinforce rather than curb the risky financial dealings of investment bankers, Australia's stock exchange head said Sunday.

Maurice Newman, the chairman of the Australian Securities Exchange (ASX), warned that the government paying top-dollar for worthless assets would worsen the predicament of Wall Street.

"The moral hazards which are being created in the United States right now - the idea that more oversight, more regulation, the automatic default whenever there's a problem will get you out of trouble - will only make the problem worse," Newman told local television.

Washington -