Tokyo - Fear grows in Japan as the world's second largest economy is hit by the most severe recession in the post-War years after enjoying several years on the economic upswing.

"Japan's economy is falling off a cliff," a Tokyo-based analyst said.

Industrial production in December was down 9.6 per cent compared to the previous month, and a whopping 20 per cent compared to December 2007 as a result of shrinking foreign demand.

Tokyo  - Honda Motor Co on Friday revised downward its earnings forecast for fiscal 2008 that ends in March after suffering from the yen's surge against other currencies and sluggish auto sales due to the global recession.

Japan's second largest automaker after Toyota Motor Corp said it expected a net profit of 80 billion yen (888.83 million dollars) for the full year, down from 185 billion yen it projected in December.

Tokyo - Toyota Motor Corp's operating loss for the fiscal year 2008 was to expand to 400 billion yen (4.44 billion dollars) from an earlier projection of a 150-billion-yen loss, media reports said Friday.

As Japan's leading automaker is suffering from declining demand and the yen's advance against other currencies, it was expected to incur the first-ever operating loss for the business year ending in March.

It was also expected to report the first net loss since 1963, when it started publishing net results, according to Japan's business daily The Nikkei.

Tokyo - Japanese electronics companies Toshiba Corp and NEC Corp began negotiations on a business alliance in semiconductor manufacturing as both are suffering from slowing market demands and severe price competition, Japanese media reported Friday.

Japan's Kyodo News Agency quoted sources familiar with the talks saying that Fujitsu, another Japanese electronics giant, may join the deal.

Tokyo  - Japan's benchmark Nikkei 225 Stock Average fell more than 3 per cent Friday due to sluggish economic data and corporate earnings reports by major Japanese companies.

The Nikkei index plunged 276.19 points, or 3.35 per cent, to 7,975.05, and the broader Topix index of all first section issues was also down 24.44 points, or 2.99 per cent, to
794.03.

Tokyo  - Japan's industrial production plunged to an unprecedented 9.6 per cent in December and unemployment rose, as the widening global recession cut export demands, the government said Friday.

Data from the Ministry of Economy, Trade and Industry revealed a steeper drop in production as compared to the previous record low of 8.5 per cent a month earlier.

The unemployment rate climbed to 4.4 per cent from 3.9 percent, the biggest jump in 41 years.