A look at economic developments around the globe

AP News
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Posted: Dec 01, 2009 3:46 PM

A look at economic developments and activity in major stock markets around the world Tuesday:

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DUBAI, United Arab Emirates _ Dubai's leader tried to calm panicky investors as regional markets tumbled for a second day on news that the city-state's chief conglomerate needs to delay payments on its $60 billion in debt for six months.

Dubai World _ the United Arab Emirates' chief engine of growth _ gave anxious investors the first bit of clarity they were hoping for on how it might meet its debt obligations. It said it had begun discussions with creditors on $26 billion of its debt that would include restructuring about $6 billion.

The conglomerate, which is involved in international projects from Gulf banks and ports in 50 countries to luxury retailer Barney's New York and a grandiose six-tower hotel-entertainment complex in Las Vegas, did not deal with the broader issue of how it would meet its entire crushing debt burden.

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LONDON _ U.K. manufacturers reported a slight improvement in conditions in November though employment fell for the 19th consecutive month, an industry group said.

In European markets, the FTSE 100 index of leading British shares closed up 121.49 points, or 2.3 percent, at 5,312.17 while Germany's DAX rose 150.66 points, or 2.7 percent, to 5,776.61. The CAC-40 in France was 95.59 points, or 2.6 percent, higher at 3,775.74.

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FRANKFURT _ The number of unemployed in Germany unexpectedly fell in November while retail sales grew, official data showed, suggesting recovery in Europe's largest economy is on track.

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TOKYO _ Japan's central bank decided to further ease monetary policy by massaging the economy with cheap loans amid government pressure to respond to a surging yen and falling consumer prices.

In an emergency meeting, the Bank of Japan voted unanimously to offer about 10 trillion yen ($115.8 billion) in short-term loans to commercial banks to boost liquidity. It also maintained its key interest rate at a super low 0.1 percent.

The yen has climbed sharply in recent days, and government officials have criticized the central bank as too complacent. The bank has also been under pressure to do something about deflation after months of falling prices.

Japan's Nikkei closed up 226.65 points, or 2.4 percent, at 9,572.20. Elsewhere in Asia, Hong Kong's Hang Seng gained 291.65 points, or 1.3 percent, to 22,113.15 and South Korea's Kospi rose 14.12, or 0.9 percent, to 1,569.72.

Elsewhere, Australia's benchmark added 0.4 percent, Singapore's market was up 1.1 percent and China's Shanghai index rose 1.3 percent.

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MOSCOW _ Russia will buy Canadian dollars in the next few months in a bid to diversify the nation's currency reserves, a senior Central bank official was quoted saying.

Russia's foreign exchange reserves _ the world's third largest _ currently stand at $443.8 billion dollars. U.S. dollars account for 47 percent of the total, while another 41 percent is in euros, 10 percent in British pounds and 2 percent in yen.

Alexei Ulyukayev, deputy chairman of the Central Bank, said in comments carried by Russian news agencies that the Canadian dollar's share will be lower than that of the yen.

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SEOUL, South Korea _ South Korea's exports rose from a year ago for the first time in 13 months in November, a further sign the country has overcome the worst of the global economic meltdown.

Exports increased 18.8 percent to $34.3 billion in November from a year earlier, the government said. Imports rose 4.7 percent to $30.2 billion.

South Korea recorded a trade surplus of $4.05 billion, the 10th straight month the country's trade balance has been in the black, according to the Ministry of Knowledge Economy, which deals with commerce.

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SEOUL, South Korea _ North Korea has revalued its currency for the first time in a half century, reportedly triggering chaos in the impoverished nation by moving to assert state control over a growing market economy.

The development came at the end of a year of turmoil as leader Kim Jong Il apparently recovered from a stroke. The communist country also stoked tensions by launching a long-range rocket and conducting its second nuclear test, drawing U.N. condemnation and beefed-up sanctions.

North Korea revalued its currency _ known as the won _ at an exchange rate between old and new notes of 100 to 1, China's Xinhua news agency said in a dispatch from Pyongyang. It cited a verbal notice from North Korea's Foreign Ministry to embassies in the capital.

The surprise move reportedly sent shockwaves through North Korea, with reports of shops being closed and citizens angry and panicked.

Xinhua said no reason was provided for the sudden change.

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BRUSSELS _ The 16 nations that use the euro are expected to agree on deadlines for most of them to reduce budget deficits that are well above the EU budget rules that underpin their currency.

It is the first major step most of the eurozone countries will make toward paying off the massive debt built up by spending billions of euros rescuing banks and paying welfare to the growing number of the unemployed during the economic downturn.

The move would also come just days after Dubai's announcement that it is having trouble handling its debt shook financial markets and raised concerns about other heavily indebted economies, such as Greece.

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BERN, Switzerland _ The Swiss economy emerged from a yearlong recession in the third quarter, the country's office for economic affairs said.

After four consecutive quarters of negative growth Switzerland's real gross domestic product increased 0.3 percent during the July-September period from the previous quarter.

GDP for the third quarter of 2009 was still 1.3 percent below the same period last year.

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