Tokyo - Japan's economy contracted at an annualized rate of 3 per cent last quarter, more than initially estimated, the government said Friday, indicating that the world's second-largest economy would not shake off its economic doldrums any time soon.

The government had previously estimated an annualized contraction in the gross domestic product (GDP) of 2.4 per cent in the April-to-June quarter.

The fall was the first for Japan in four quarters.

Tokyo - Tokyo stocks rebounded Friday after overnight gains on Wall Street.

The benchmark Nikkei 225 Stock Average rose 128.49 points, or 1.06 per cent, in morning trading to 12,230.99.

The broader Topix index of all first-section issues was also up 12.44 points, or 1.06 per cent, at 1,175.16.

Investors in Tokyo and New York were cheered by takeover speculation about embattled Lehman Brothers Holdings Inc, which helped lift concern about financial markets.

Tokyo- Japan's machinery orders fell 3.9 per cent in July in seasonally adjusted terms compared with the previous month, the government said Thursday.

Private-sector machinery orders declined an unadjusted 4.7 per cent from the same month a year before to 1.04 trillion yen (9.72 billion dollars), the Cabinet Office said.

Private-sector machinery orders are regarded as a leading indicator of corporate capital spending about six months ahead, and the second drop in two months indicated that manufacturers expected the global economic slowdown to further dampen demand.

Tokyo - Japan is to withdraw its Air Self-Defence Forces from Iraq by the end of the year, the Defence Ministry said Thursday.

The nation's air force has been assisting the US-led coalition in airlifting materials and troops between Kuwait and Iraq since 2006.

The scheduled pullout of the remaining personnel would complete the withdrawal of Japan's Self-Defence Forces from Iraq. It sent in ground troops in 2004 in its first military deployment in another country since World War II. The soldiers, who helped with Iraq's reconstruction, were withdrawn in 2006.

Tokyo's decision was expected to irritate the United States, Japan's most important ally, which urged Japan to continue its mission.

Tokyo - Tokyo stocks continued their losing streak Thursday on lingering US credit woes.

The benchmark Nikkei 225 Stock Average declined 149.74 points, or 1.21 per cent, in morning trading to 12,196.89.

The broader Topix index of all first-section issues was also down 18.13 points, or 1.5 per cent, at 1,174.25.

Shares were hit after Lehman Brothers Holdings Inc, the fourth-largest US investment bank, which has been hard-hit by the US financial and mortgage crisis, reported a record loss Wednesday of 3.9 billion dollars.