March 12 (Bloomberg) -- Asian stocks and U.S. futures retreated after China’s industrial production slowed, Australia’s jobless rate rose and Japanese government data confirmed the nation’s economy shrank the most since 1974.

China Railway Construction Corp. slid 3.3 percent as the nation’s output growth slipped to 3.8 percent in January and February. Woolworths Ltd., Australia’s biggest retailer, lost 1.6 percent after unemployment reached a four-year high. Mitsubishi UFJ Financial Group Inc., Japan’s No. 1 listed bank, sank 3.7 percent after the government confirmed gross domestic product fell last quarter by the most since the 1970s oil shock.

“The global economy is weakening in such a highly synchronized way that everybody is affected,” said Stephen Halmarick, Sydney-based Head of Investment Markets Research Colonial First State Global Management, which manages about $84 billion. “I’d still be cautious on the Asian economies.”

The MSCI Asia Pacific Index fell 1.1 percent to 72.68 as of 8:23 p.m. in Tokyo, snapping a two-day, 4.1 percent advance. Japan’s Nikkei 225 Stock Average lost 2.4 percent to close at 7,198.25. Most markets in Asia declined except for those in South Korea, India, and Pakistan.

MSCI’s Asian index has slumped 19 percent this year, extending last year’s record 43 percent drop as the global recession decimated company profits. Reported earnings for companies in the index have fallen by about half from a year ago, according to data compiled by Bloomberg.

Futures Drop

Toyota Motor Corp., the world’s No. 1 carmaker, lost 3.1 percent in Tokyo after saying it was concerned suppliers may run short of cash. Nippon Telegraph & Telephone Corp., Japan’s largest fixed-line phone company, slumped 5.8 percent to a record low after an analyst downgrade.

Futures on the Standard & Poor’s 500 Index fell 1 percent. The gauge added 0.2 percent in New York yesterday as JPMorgan Chase & Co. joined Citigroup Inc. in saying it was profitable in January and February.

“Positive comments from the U.S. banks are reassuring, but we’re not out of the woods yet,” said Nicole Sze, a Singapore- based investment analyst for Bank Julius Baer & Co., which manages $350 billion. “Investors are still waiting for concrete signs that the economy has bottomed.”

Inpex Corp., Japan’s largest oil explorer, dropped 5.1 percent to 651,000 yen. Woodside Petroleum Ltd., Australia’s second-largest oil producer, slipped 2.7 percent to A$35.98.

China Production

Crude oil for April delivery plunged 7.4 percent yesterday to $42.33 in New York as U.S. inventories climbed and fuel consumption retreated to a two-month low. Oil gained 1.9 percent in after-hours trading today.

China Railway fell 3.3 percent to HK$9.28 in Hong Kong. GD Midea Electric Appliances Co., China’s second-biggest publicly traded appliance maker, slumped 3.4 percent to 9.50 yuan in Shenzhen, southern China.

China’s industrial-production growth slowed in the first two months of the year as exports slid at a record pace, while bank lending jumped as the nation’s 4 trillion yuan ($585 billion) stimulus began to take effect. Chinese Premier Wen Jiabao reiterated last week the government’s pledge to “significantly increase” investment in 2009.

Governments have stepped up efforts to avert what the World Bank predicts will be the first global economic contraction since World War II. U.S. Treasury Secretary Timothy Geithner yesterday urged the Group of 20 nations to take “forceful” actions to end the financial crisis.

Mitsubishi UFJ slumped 3.7 percent to 396 yen. JFE Holdings Inc., Japan’s No. 2 steelmaker, plunged 6.5 percent to 1,907 yen, the lowest since July 2003. Fanuc Ltd., the world’s largest maker of industrial robots, dropped 5.1 percent to 5,600 yen.

Japan Economy

Gross domestic product in Japan shrank an annualized 12.1 percent in the three months ended Dec. 31, government figures today showed, as exports, output and business spending collapsed. The figure was less than the 12.7 percent reported last month.

The Japan Bank for International Cooperation said it has received requests for emergency loans totaling as much as $40 billion since the end of 2008, almost four times its original budget for the fiscal year that ends March 31.

“Not just automakers, but electrical and chip companies, and also other manufacturers, are coming to us in large numbers,” Hiroshi Watanabe, chief executive officer of the Tokyo-based JBIC, said in a March 10 interview.

Government Support

Woolworths dropped 1.6 percent to A$25.10 in Sydney. Westpac Banking Corp., Australia’s largest bank by market value, lost 1.6 percent to A$16.60.

Australia’s jobless rate rose in February to the highest in four years as companies fired the most full-time workers in almost two decades, adding to signs the economy is in a recession.

New Zealand’s central bank today reduced its benchmark interest rate to a record low to help steer the economy out of its worst recession in 30 years. The Bank of Korea, meanwhile, unexpectedly left its interest rate unchanged as policy makers struggled between the need to stimulate the economy and prevent a further slide in the won, the worst performing Asian currency against the dollar this year.

Honda Motor Co. slumped 6.6 percent to 2,065 yen after the yen strengthened to as high as 95.67 to the dollar, the highest since Feb. 23. Sony Corp., which gets a quarter of its sales from the U.S., declined 3.7 percent to 1,735 yen. A stronger yen lowers the value of Japanese exporters’ overseas sales when converted back into the local currency.

Rescue Scrapped

Toyota sank 3.1 percent to 2,820 yen after Jim Lentz, president of its U.S. sales unit, told the U.S. government’s auto task force yesterday suppliers may run short of cash and any failures could disrupt production. NTT slid 5.8 percent to 3,430 yen, the lowest since its listing in February 1987. Mizuho Securities downgraded the stock to “buy” from “strong buy.”

Elpida Memory Inc. led declines in shares of computer- memory makers after Taiwan’s economic affairs minister ruled out a state-led merger of chipmakers. Elpida, Japan’s biggest maker of dynamic random access memory, or DRAM, plunged 19 percent to 420 yen. Powerchip Semiconductor Corp., Taiwan’s largest maker of the chips, fell 5.1 percent to NT$3.16.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: March 12, 2009 07:25 EDT