Your update of the most important business news from dozens of respected news sources, selected by the editors of BusinessWeek.

Early Edition October 31 2008 at 05:43 AM Chi-Chu Tschang and Harry Maurer

Bank of Japan Cuts Key Rate to 0.3%

The Bank of Japan cut its benchmark interest rate for the first time in seven years, joining the U.S. Federal Reserve and other central banks in efforts to ease a looming global downturn. The Japanese central bank's policy board voted to lower the overnight lending rate between banks by 0.2 percentage points to 0.3%. The cut was aimed at reducing borrowing costs to rekindle growth in the largest Asian economy.

BOJ Governor Masaaki Shirakawa cast the deciding vote in a split decision, with four of the eight board members opposing the cut. Shirakawa came under pressure to lower borrowing costs after Japan's currency surged to a 13-year high last week and the Nikkei 225 Stock Average slumped to the lowest level since 1982. But the rate cut failed to halt a drop in the Nikkei index, which lost 5% on Friday, ending a three-day rally.

Source: New York Times, Bloomberg

U.S. Governors Call for Auto Industry Aid

Six U.S. governors and a group of chief executives called on the Bush administration to aid the embattled auto industry while the White House rebuffed a request for direct support of a merger between GM and Chrysler. An administration official said the focus instead would be on speeding up disbursement of $25 billion in low-interest loans for factory retooling, a step the industry's allies say does not go far enough to reverse a deepening industry crisis.

Source: Reuters

U.S. Banks Owe Billions to Executives

Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for unpaid salaries and pensions as of the end of 2007. Criticism of executive pay has gained momentum this election year with presidential candidates from both major parties lashing out over rich payouts for CEOs of companies that have suffered big losses in the U.S. housing market bust and ensuing credit crisis. The government has sought to rein in executive pay at banks getting federal money as part of the Bush administration's $700 billion bailout program.

Source: Wall Street Journal

Flush with Cash, Drugmakers Go on the Prowl

Drug companies, including giant GlaxoSmithKline and its midsize rival Wyeth, have amassed astonishing hoards of cash, which places them in an enviable position as the world slides into recession. But they will have to dig deep into their stashes to buy the growth that has eluded them for the past decade. That means choosing targets that are most likely to create blockbuster drugs and to open up whole new areas of disease treatment.

Source: BusinessWeek

Barclays Turns to Middle East

Barclays is raising up to $11.8 billion of additional capital in a share sale to an investor group, including Qatar and Abu Dhabi, in a move that will allow the UK bank to boost its balance sheet without turning to the British state for cash. The cash injection will largely fulfill Barclays' pledge to raise $10.5 billion in fresh capital as part of the state-sponsored recapitalization of Britain's largest banks.

Source: Financial Times

Google Considers Abandoning Ad Venture with Yahoo

Google may drop its proposed Internet-search advertising venture with Yahoo because it is reluctant to accept restrictions to avert a possible court challenge by U.S. antitrust officials, people familiar with the deal say. A collapse of the planned venture between the two biggest online advertising companies would deprive Yahoo of as much as $450 million in operating cash flow over a year. Microsoft offered $47.5 billion to buy Yahoo earlier this year.

Source: Bloomberg

Nissan Cuts Profit Forecast

Nissan reported a 39% drop in fiscal second quarter profit, as a strong yen and a contraction in the U.S. market combined to batter earnings at Japan's No. 3 automaker. Tokyo-based Nissan also drastically lowered its net profit forecast for the fiscal year through March 2009 to 160 billion yen ($1.6 billion), down 67 percent from the previous year. Earlier, Nissan had expected a 340 billion yen ($3.5 billion) profit for the fiscal year.

Source: Associated Press

Stimulus Payments, Tax Refunds Worth $266 Million Unclaimed

The U.S. Postal Service has sent back $266 million worth of economic stimulus payments and tax refunds to the Internal Revenue Service because taxpayers' addresses are out of date, the IRS says. Taxpayers whose stimulus checks were sent back to the IRS need to update their addresses with the tax agency by Nov. 28 if they want to get that check. Still, people who fail to claim their stimulus check this year can re-apply for it on their 2008 tax form next year.

Source: MarketWatch

Electronics Arts Lowers Earnings Forecast

Electronic Arts, the world's largest game publisher, lowered its profit forecast for the year and said it planned to cut its workforce by about 6%. The publisher of video game franchises including as Madden NFL and the Sims said retail sales of its games slowed in October -- right about the time the global financial crisis deepened. After years of hiring, EA said it planned to eliminate 500 to 600 of its 9,400 jobs to try to save $50 million a year in expenses

Source: Los Angeles Times

In Your Face: Tips for Entrepreneurs

Reader Stephanie Dube Writes: "First point: 'Love what you do.' If you don't love your work, then you'll never make it through the inevitable setbacks and tough times!"

Tell Us: How to Keep a Downturn from Crushing Startups?

Hot Topic on the Business Exchange: 2008 Election

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