TOKYO (AP) -- Japan's economy slid into a recession for the first time since 2001, the government said Monday, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis.

Government officials and economists warned that the world's second-largest economy could contract further in coming months.

Japan's economy shrank at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction.

"What we're starting to see is the extent of deterioration in external demand start to weigh more heavily on the Japanese economy," said Glen Maguire, chief Asia economist at Societe Generale. "And I think looking forward, there's every indication that dynamic is going to continue."

The result was worse than expected. Economists surveyed by Kyodo News agency had predicted gross domestic product would gain an annualized 0.1 percent.

Japan's Economy Minister Kaoru Yosano said following the data's release that "the economy is in a recessionary phase."

But the worst may be yet to come, especially with dramatic declines in demand from consumers overseas

In the period between 2004 and 2007, the Chinese stock market index rose more than 450%. On the streets of Shanghai I witnessed lines of Chinese citizens waiting outside brokerages to deposit funds so they could trade on the big stock market boom. The hyperbole surrounding the Great Chinese Miracle approached that of Japan, Inc., nearly two decades ago.

This was it -- missing out on China would be the greatest mistake investors of our generation could make.

You know what happened next, don't you?
In the past eight months, the Shanghai Stock Index has declined by nearly 50%. Speculators from Shanghai, Beijing, and all over China have seen their brokerage accounts get smoked.

It's a bit of a fortunate accident for foreign investors that shares trading on Chinese exchanges are largely limited to Chinese investors. Still, the whiff of opportunity a year ago has suddenly turned into the stench of decay. For people who are fundamentally opposed to overpaying for great investments, you couldn't ask for a better situation: Companies based in the world's most important growth economy are suddenly trading at a fraction of their former prices.

Wait, isn't the Chinese dream dead?
No.

But the market collapsed! Someone must know something!

China is urbanizing. Oil platforms are going up in the world's oceans. And Brazilian automakers are ramping up for a growing middle class.

The world's steel producers are trying to keep up.

Companhia Siderurgica Nacional (NYSE:SID - News), Brazil's third-largest steel producer, is stepping up to the challenge.

The Rio de Janeiro company expects to spend $6 billion over the next six years to add new steel mills. The new mills will add 9 million tons to its current crude steel capacity of 5.6 million tons a year.

It's also investing in its mines and ports to increase its iron ore export capacity.

But even as global demand rises, CSN is looking first to its expanding domestic market. About three-quarters of sales are within Brazil.

In addition to expanding its core steel and mining business, CSN is building a cement plant to supply booming Brazilian construction markets.

"The middle class is growing, and the consumption is growing as well," said Jose Marcos Treiger, head of

KIEV, Ukraine (AP) -- Prime Minister Yulia Tymoshenko said Wednesday that Kiev should charge Russia more for transit of the gas it sends to Europe via Ukraine, a statement that is likely to aggravate already uneasy relations with Moscow.

Late last year, Ukraine agreed to a 40 percent increase in the price for gas imported from Russia, and now pays $179.50 per thousand cubic meters.

Most of the gas Ukraine uses is imported from the energy-rich Central Asian nation of Turkmenistan. The gas is imported through a Swiss-based trading company, RosUkrEnergo, half of which is owned by Russia's state-owned monopoly Gazprom and half by two Ukrainian businessmen.

Tymoshenko argued that since Ukraine is now paying more for gas, it should also earn more for shipping it to Europe.

"The time has come for Ukraine and Russia to have a discussion regarding the cost of transiting Russian gas through Ukrainian territory to Europe," Tymoshenko said after a Cabinet meeting, according to her office.

Ukraine currently charges $1.70 per 1,000 cubic meters for every 100 kilometers, the same transit price

MOSCOW (AP) -- Russia said Wednesday a draft U.N. resolution on Iran's disputed nuclear program does not call for any harsh sanctions, and the Iranian president said new measures would not deter the country in its pursuit of nuclear technology.

EU foreign policy chief Javier Solana planned to meet with Iran's senior nuclear negotiator later Wednesday in talks that would probably address the new draft resolution, European Union officials said.

Russian Foreign Minister Sergey Lavrov said the draft encourages countries to be vigilant in their dealings with Iran to prevent the illegal transfer of nuclear material, but it "does not foresee any harsh sanctions."

"It calls for countries to be vigilant while maintaining trade and economic and transport and other ties with Iran so that they are not used for the transfer of forbidden nuclear material," he said at a news conference a day after the draft was approved by the five permanent Security Council members and Germany.

These terms "will be enforced until the International Atomic Energy Agency's concerns are resolved

NEW YORK (AP) -- Chinese initial public offerings raised more than $100 billion from overseas and domestic capital markets during 2007, according to a report released by an Chinese IPO research group.

The report was prepared by the research wing of Zero2IPO Group, a service provider for the Chinese venture-capital and private-equity industry.

According to the report, there were 242 Chinese IPOs on domestic and overseas markets during the year, totaling $104.83 billion.

On overseas markets, including the Nasdaq Stock Market and New York Stock Exchange, 118 Chinese IPOs raised $39.74 billion. There were 86 Chinese IPOs on overseas markets in 2006 and 81 in 2005.

The number of Chinese IPOs on the New York Stock Exchange rose to 18 in 2007, from 3 in 2006 and 1 in 2005. On the Nasdaq, the number of Chinese IPOs increased to 11 in 2007, from 6 in 2006 and 7 in 2005.

Domestically, 124 Chinese IPOs raised $65.09 billion during the year, compared with the 65 Chinese IPOs that raised $17.11 billion in 2006.

TOKYO (AP) -- Asian stock indexes rose sharply Wednesday, rebounding from steep losses in the previous two days after a surprise interest rate cut by the U.S. Federal Reserve.

Japan's benchmark Nikkei 225 index gained 423.82 points, or 3.37 percent, to 12,996.87 points on the Tokyo Stock Exchange in early trading. It had fallen 5.7 percent Tuesday -- its biggest percentage drop in nearly 10 years -- on fears of a recession in the U.S.

The Korea Composite Stock Price Index rose as much as 3.1 percent in the opening minutes of trading. The Kospi slightly pared gains to trade up 2.7 percent at 1,652.39 about 30 minutes into the session. The Kospi fell 4.4 percent Tuesday and 3.0 percent Monday.

European stocks fell sharply at their opening Tuesday, then rose in volatile trading ahead of the Fed's decision to cut its key rate to 3.5 percent from 4.25 percent, and rose even more afterward. The U.K.'s FTSE 100 finished up 2.9 percent at 5,740.10, while France's CAC 40 gained 2.1 percent to 4,842.54. In Germany, the DAX ended barely down, off 0.3 percent at 6,769.47, as utilities RWE and E.On fell but financials such as Deutsche Bank rose.

The surprise Fed move was aimed at fears that trouble in financial markets from the U.S. subprime crisis was spreading to the broader economy. Interest rate cuts tend to boost stocks. The Canadian central

BEIJING (AP) -- Shares in China's banks fell sharply Monday after news reports said its No. 2 lender, Bank of China, might write down holdings of U.S. mortgage securities and two others increased reserves for possible losses.

The reports were the first indication that Chinese lenders, which have so far avoided damage from the U.S. credit crisis, might face problems due to their holdings of subprime securities.

Also Monday, China's banking regulator warned that lenders might face risks from fluctuations in fast-rising real estate prices.

Bank of China is expected to announce a "significant writedown" on its $7.95 billion in U.S. subprime mortgage securities, Hong Kong's South China Morning Post newspaper reported, citing unidentified sources.

Bank of China spokesman Wang Jianping declined to comment. He said the bank would release details of its assets in late March when it announces annual earnings.

Bank of China shares fell 4.1 percent in Shanghai market and by 6.4 percent in Hong Kong. China's biggest banks are listed in both cities, with shares in Shanghai off-limits to most foreign investors, while

Last year Brazil seemed poised to shrug off its reputation as the laggard of the BRICs, the four hot emerging economies