Japan vowed to take new measures on Monday to protect its economy from the continuing fall-out of the global financial crisis and announced that the Group of Seven nations would come up with a joint statement on the yen.

The Nikkei average plunged to a 26-year low as investors dumped banking stocks and said that they need fresh capital infusion to offset losses in their stock portfolio. The bloodbath at the stock markets prompted Japanese Prime Minister Taro Aso to declare that the government will expand its bank bailout plan and enforce regulations on short-selling of stocks.

Economic minister of Japan Kaoru Yosana too tried to reassure the financial sector by stating that the country’s prime minister had ordered action to stabilize markets and bolster the economy. He further added that the nation’s bank bailout scheme should be raised to almost $110 billion.

on a separate platform, Japan’s finance minister, Shoichi Nakagawa, announced that the Group of Seven nations would issue a joint statement on the yen and the G-7 countries are expected to cooperate appropriately on foreign exchange markets. Last week the yen had spiralled to the highest level in several years against the dollar and the euro as investors unwound risk and sought to invest in the yen.

US auto maker, Chrysler LLC, will cut down its salaried workforce by 25% by the end of this year, the company announced on Friday.

Auburn Hills, Michigan-based Chrysler is one of the country’s three major auto manufacturers, the other two being the much bigger General Motors Corp and Ford Motors Corp. Chrysler’s decision to reduce its workforce by almost a quarter will affect at least 5000 employees out of a total 18500 white-collared workers. The company official also said that the job lay offs will mainly affect Chrysler’s salaried and supplemental workforce.

David Elshoff, spokesman of Chrysler said that the salaried employees of the company who stood to lose their jobs would be offered buyouts as well as retirement packages. However its supplemental workforce, which comprised of employees of external contractors working at Chrysler plants, would be not be offered any such packages. Details of the offer are expected to emerge after being finalized and will be explained to the employees over the next two weeks. If however not enough employees are willing to accept the voluntary exit package, the company will begin involuntary lay-offs through December, said a Chrysler spokesman.

Chrysler LLC is privately owned by Cerberus Capital Management and has reportedly been negotiating with General Motors for a buy-out or a merger.

United States saw the biggest ever drop in the average retail price of a gallon of gasoline over the past two weeks as the pressure of an economic recession kept demand low and drivers stayed off the roads.

Results of a Lundberg survey revealed that the national average price for a gallon of self-serve, regular unleaded gas was $2.7785 on October 24, thus marking a fall of around 53 cents a gallon in the last two weeks. Also gasoline is currently about a penny cheaper than it was a year ago and $1.33 lesser than the record peak it had reached on July 11 when the prices of crude oil had touched $147 a barrel. The survey included around 7000 gas stations across the country.

Analysts believe that the significant fall in the average retail price of gasoline was occasioned by the sharp decline in crude prices and then substantiated by depressed demand from consumers, most of who chose to cut down on the use rather than shell out the extra cash. Survey editor Trilby Lindberg predicted that prices will likely slide still further but not at the rate at which it had fallen in the last two weeks.

On Friday, prices of crude oil settled down by nearly $ 4 a barrel, driven by fears of a global economic recession despite an OPEC decision to cut oil output.

The IMF announced on Sunday that it had arrived at a broad understanding with Hungary on a set of financial policies, which would provide assistance to the Central European economy and enable it to deal with the impact of the global credit crisis.

Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, revealed that details of the financial assistance would be available in the next few days after the plan is finalized. Strauss-Kahn however said that the plan would include “a substantial financing package” and would involve a wide spectrum of international organizations. Besides the 185-nation strong International Monetary Fund, other regional and multi-lateral organizations like the European Union as well as a few European nations were expected to be part of the plan to accord financial assistance to Hungary.

The weekend saw IMF coming out with plans for financial assistance to countries like Ukraine and Hungary in an attempt to bolster the smaller economies as they struggle to survive with the effects of the global financial crisis. Few days back, Iceland became the first Western nation in the last three years to receive financial aid from the International Monetary Fund after its economy was ravaged by the collapse of the country’s banking industry.

Porsche SE announced Sunday that it plans to increase its holding in Volkswagen AG to 75% next year and outlined steps that would enable it to attain the goal while keeping stock volatility low.

Based in Stuttgart, Germany, Porsche is the maker of the 911 sports car. Currently Porsche owns 42.6% in Volkswagen’s common stock and has cash-settled options for another 31.5%. Porsche intends to acquire at least 50% stake in Volkswagen by December this year.

Volkswagen is the largest car manufacturer in Europe and ever since March this year, it has caught the attention of Porsche which wants to effect a take over. The acquisition will help Porsche to boost sales as it gears to meet fierce competition from international car makers.

Along with automakers in North America, those in Europe too are facing the full brunt of global economic slump. Last week PSA Peugeot Citroen reported that its third quarter revenue had fallen by 5.2% while Renault SA reported a 2.2% slide. The world’s second-largest maker of heavy trucks, Volvo AB, cut its outlook for the rest of the financial year and Toyota Motor Corp recorded the first drop in sales in the last seven years.