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Problems with Toyota cars are cropping up faster than the automaker can deal with them. Following two different recalls for problems involving accelerator pedals on various models comes the revelation of braking problems in the iconic Prius.

Here’s a rundown of the problems, the cars involved and what to do if your car’s caught up in any of this.

Prius brakes

What’s the problem? Under certain conditions, particularly at relatively low speeds when traveling over rough or potholed roads, drivers have complained of a brief, but significant, delay in brake performance.

Is it being blamed for crashes? Yes, at least four crashes in the U.S. have been reported, allegedly as a result of this problem.

What cars are involved? 2010 model year Toyota Priuses made before January, 2010. Toyota is also investigating whether the Lexus HS250h hybrid, which shares its mechanical parts with the Toyota Prius, might have a similar problem.

Is there a recall? No, at least not yet.

Is there a fix for it? None has been announced yet, but Toyota has fixed the problem on cars coming off the assembly, so there does seem to be some sort of solution. Now Toyota has to figure out how to get that change made to cars already on the road.

What should I do? The safest thing to do, of course, would be not to drive the car until the problem has been fixed. If you do drive, be aware of the problem and allow extra following distance and be begin to stop a little sooner for red lights and stop signs, especially if the road is choppy.

David Champion, Consumer Reports’ head of auto testing, also reminds drivers not to lift off the brake pedal if they feel a loss of power. Instead, keep your foot pressed down hard on the brake pedal and don’t pump the brakes.

Sticky gas pedals

What’s the problem? Over time, gas pedals in some cars become sticky. At first, they just become a little harder to push down and when you lift your foot off the gas, they’re slower to come back up. In the worst case, the pedal on these cars can become stuck part way down.

Is it being blamed for crashes? There have been no crashes or injuries reported as a result of this problem.

What cars are involved? Toyota’s 2009-2010 RAV4, Corolla and Matrix models; the 2005-2010 Avalon; 2010 Highlander; 2007-2010 Tundra and the 2008-2010 Sequoia; and some 2007-2010 Camrys (only those with gas pedal assemblies made by a specific Toyota supplier; your dealer can check). No Lexus or Scion models are involved.

Is there a recall? Yes , 2.3 million vehicles.

Is there a fix for it? Yes. Toyota dealers can install a small metal plate that reduces wear on the plastic parts involved.

What should I do? Get your car fixed as soon as you can. If your gas pedal starts to feel sticky, stop driving immediately, Toyota says. Pull over in a safe place, then call a dealer.

If the pedal becomes stuck part way down, applying the brakes should be enough to slow the car and bring it under control. Don’t pump the brakes, though. That will just weaken your power brakes. Instead, press and hold the brakes. Also, at the same time, you can shift the transmission into neutral, which will stop the engine from driving the wheels.

Keep in mind that these situations are rare occurrences.

Floor mat pedal entrapment

What’s the problem? In some cars, gas pedals can become stuck on the edge of afloor mat, particularly when thick all-weather floor mats are used or when floor mats are stacked on top of one another. In this case, the pedal can be stuck almost all the way to the floor, creating a particularly dangerous situation.

Is it being blamed for crashes? Yes, there have been crashes and some deaths on account of this problem.

What cars are involved? 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, 2009-2010 Pontiac Vibe (a version of the Matrix), 2007-2010 Toyota Camry, 2005-2010 Avalon, 2004-2009 Prius, 2005-2010 Tacoma, 2007-2010 Tundra and the 2007-2010 Lexus ES350, 2006-2010 IS250 and the 2006-2010 IS350.

Is there a recall? Yes 5.3 million vehicles have been recalled for floor mats.

Is there a fix for it? Yes. Dealers will alter the shape of the gas pedal to prevent it becoming stuck on the floor mat even when thick or stacked floor mats are used. In some cars, the floor area under the gas pedal may also be reshaped slightly to make more room.

What should I do? Get your car fixed as soon as possible. If your car hasn’t been fixed yet remove your floor mats.

If your gas pedal becomes stuck in the "floored" position, immediately shift the transmission to "Neutral" and press hard on the brake pedal. Don’t pump the brakes but apply even, firm pressure. 

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Florida is among a handful of states that posted the largest monthly gains in the number of online job postings, which were up by 25,500 in January, according to The Conference Board’s Help Wanted OnLine Data Series. Only California, with a 67,600 jump, had more.

"The last three months have shown a sharp upturn in employer demand for workers," said Gad Levanon, associate director of macroeconomic research at The Conference Board, in a news release. "These increases have brought us back near the labor demand levels that existed in November 2008, just prior to the huge losses resulting from the financial turmoil in the last quarter of 2008. This is very good news since these seasonally adjusted increases come in two months, when we normally see employers cut back on advertising for workers."

And, while that’s good news, the number of unemployed continues to exceed the number of advertised vacancies in all 52 of the metropolitan areas The Conference Board looks at.

In Miami, there were nine unemployed people for every five vacancies posted in November 2009, the latest month for which unemployment data was available.

Among the 10 occupation groups with the largest number of online advertised vacancies nationwide, office and administrative support occupations posted the largest January gain, up 74,100.

• Advertised vacancies in management occupations were up 54,500 in January, to 427,400.
• Computer and mathematical science professions rose 40,600 in January, to 514,700.
• Labor demand for health care support occupations rose 6,500 to 119,000.

Demand for health care support workers has remained relatively steady throughout the recession, although the number of unemployed seeking work in this field has remained relatively high, The Conference Board noted.

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The Federal Reserve on Monday proposed allowing banks to set up the equivalent of certificates of deposit at the central bank, a move that would help the Fed mop up money pumped into the economy and prevent inflation from taking off later.

Under the proposal, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.

The proposal comes as no surprise. Federal Reserve Chairman Ben Bernanke and other Fed officials have repeatedly said the creation of so-called "term deposits" — essentially the equivalent of CDs for banks — would be one of several tools the Fed could use to drain money from the economy when the time is right.

Against that backdrop, the Fed said the proposal "has no implications for monetary policy decisions in the near term."

With both the economy and the financial system on the mend, the Fed this year started to wind down and scale back some emergency lending programs. Many of those programs were set up at the height of the financial crisis in the fall of 2008 when some credit markets virtually shut down.

Lending conditions have improved but still aren’t back to normal. They continue to restrain the recovery.

The Fed’s balance sheet has ballooned to $2.2 trillion, reflecting the creation of lending programs intended to ease the financial crisis. That’s more than double the pre-crisis level. The Fed will need to mop up that money or it could trigger inflation down the road.

The Fed proposed that the interest rate paid on the term deposit be set through an auction mechanism.

Banks wanting to hold a term deposit would bid in regularly scheduled competitive auctions. The banks would indicate both the interest rate at which they are willing to be paid and the amount of money they want to deposit into the account at that interest rate.

Given that process, it’s unclear now what the rates on the accounts would be.

The Fed said it anticipated term deposits with "relatively short maturities" likely ranging between one and six months. It said deposit maturities wouldn’t exceed one year, and no early withdrawals of money in the accounts would be allowed.

Most economists don’t believe the Fed will start raising its key bank lending rate, which influences a range of consumer lending rates, until the middle of next year.

Separately, in a weekly report issued Monday, the Fed said banks cut back on emergency loans from the central bank, a fresh sign credit problems have eased.

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Exxon Mobil may be getting more than it bargained for with its recent plan to purchase natural gas giant XTO Energy.

The $41 billion deal would make Exxon the country’s largest shale gas producer, drawing more attention to a controversial area of drilling that analysts say could invite tightened federal regulations for the entire industry.

When the acquisition was announced last week, it was generally seen as a smart business move. XTO (XTO, Fortune 500) is a big player in the so-called "unconventional" gas business — specifically, gas that lies in shale rock formations.

That business is booming. It’s one of the fastest growing energy sectors in the country. But some of the shale is near major population centers, and residents near the drilling are worried about air and, especially, water pollution from the chemicals used to extract shale gas.

"A $41 billion investment is going to make anyone with an environmental eye look sooner and deeper," said Kevin Book, a managing director at ClearView Energy Partners, a Washington, D.C.-based firm that tracks political developments in the energy sector. Exxon’s (XOM, Fortune 500) entry into the field, along with interest from other international oil companies, means that shale gas has hit the big time, Book said.

The shale gas industry has been operating in relative obscurity and with minimal federal oversight: A 2005 law exempted it from the federal Safe Drinking Water Act. State regulators do the policing.

Although there are air pollution and land issues associated with shale gas drilling, what most concerns people is the water. Extracting shale gas relies on a method known as hydraulic fracturing, where a huge amount of chemical-laced water is injected down the well hole to fracture the rock and allow the gas to flow out.

State regulators and the industry say the process is safe, as the gas lies thousands of feet below the water table.

But residents near the drilling, which includes much of the New York metro area, Dallas-Fort Worth, and other large population centers, fear the chemicals may contaminate the drinking water.

The federal Environmental Protection Agency has only just begun looking into the issue payday loans for bad credit.

Book said several bills in Congress include provisions that direct the EPA to study the issue more broadly, and could ultimately lead to further regulation. "These are the placeholders," said Book. "Is a change in the law coming? Probably."

Pushing up the price of clean energy

A change in regulation could result in gas companies having to pump out the injected water and removing the chemicals before disposing of it back in the ground. That could add anywhere from 8% to 30% to the cost of operating a well, said Neil Dingmann, a Houston-based analyst at Wunderlich Securities.

Yet pushing up the price of natural gas is not something environmentalists are keen to do. Natural gas is much cleaner source of electricity than coal and emits about half the carbon dioxide. Making it more expensive would only deter industries from using it, and push them toward cheaper and dirtier power sources like coal.

Exxon is so concerned about a change in the law it has a clause with XTO that allows it to walk away from the deal if Congress bans hydraulic fracturing or makes it prohibitively expensive, according to filings with the Securities and Exchange Commission. Exxon declined to comment for this story.

Dingmann also said there’s another reason Exxon may bring new attention to this type of drilling: They are a high profile company.

"It’s not the energy committee going after some company nobody’s heard of," said Neil Dingmann, a Houston-based analyst at Wunderlich Securities. "It’s big, bad Exxon."

Soon after the XTO deal was announced Chairman of the House Energy and Environment Subcommittee Rep. Ed Markey, D-Mass., issued a statement.

While acknowledging natural gas’ environmental benefits, Markey questioned the environmental safety of the drilling and raised anti-trust issues.

"I intend to convene hearings in the Subcommittee early next year so that our members can take a closer look at this proposed transaction," he said. 

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The developer of Tempe apartments designed and marketed for Arizona State University students says it has resolved a payment dispute and lawsuit with a construction contractor.

Chicago-based Campus Acquisitions says it has settled a $3 million lawsuit filed by contractor Nelson Phoenix LLC. Nelson claimed that Campus had not paid it for work done on the Vue on Apache.

The private development sits just east of ASU’s Tempe campus.

Campus Acquisitions Project Manager J.J. Smith said in a prepared statement the two companies resolved the $3 million dispute with mediators and “a new mutually agreeable payment amount" was established on a payment plan, Smith said payday loan.

The Vue on Apache, which opened August 2009, is one of the first privately developed and owned housing projects intended for ASU students, according to Smith’s statement.

Nelson filed a tax lien and lawsuit against Campus in late October saying Campus failed to make final payments on the private student housing next to ASU.

Calls to Nelson Phoenix LLC were not immediately returned.

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MONTREAL – Canadian National Railway Co. and the Teamsters union reached a deal on Wednesday to end a strike by locomotive engineers, avoiding a potential blow to the fragile economic recovery.

Teamsters Canada president Daniel Shewchuk said the engineers will get back to work as quickly as possible, but didn’t provide a timeline.

Federal Labour Minister Rona Ambrose said restoring full service quickly is critical to the economy.

"Canada is still at the early stages of a recovery from the global economic downturn and could not afford slowdowns and stoppages in such a critical component of the national infrastructure," Ambrose said in a statement.

The minister said the deal to end the strike, which began on Saturday, was reached as a result of "intense bargaining."

Under the terms of the agreement, CN (TSX: CNR) will not proceed with controversial work rule changes it announced last week including increasing the monthly mileage cap for the locomotive engineers.

CN and the union have also agreed to continue negotiations to resolve issues related to wages, benefits and work rules, but if there is no agreement any dispute over wages and benefits will be settled by binding arbitration.

The two sides may also agree to submit work-rule issues to binding arbitration, but only if they can agree on the ones that should be subject to arbitration.

CN president and chief executive Hunter Harrison said the deal gives both sides the flexibility to negotiate issues further, but also ensures the finality of binding arbitration for issues that remain in dispute.

"We have always sought, since starting negotiations 14 months ago, to achieve a settlement with the TCRC through negotiations or binding arbitration," Harrison said in a statement.

Ambrose said she will appoint federal mediators and an arbitrator to help finalize the other outstanding issues.

The deal came after Ottawa introduced legislation Monday to end the strike.

CN is the country’s largest railway and the government cited worries about the weak economy to justify the strike-ending legislation.

"Continuing the strike for any further amount of time would have had grave consequences for our economy," Ambrose said.

Managers have been running the trains since the walkout began.

Edward Jones analyst Brian Yarbrough said the deal looks positive for both sides.

"You never like to see people out there unemployed in this kind of environment and you don’t like to see the potential negative impacts this could have caused to the overall economic rebound," Yarbrough said from St. Louis.

Since the strike was so short, there shouldn’t be any serious economic effects, he added.

The 1,700 engineers, members of the Teamsters Canadian Rail Conference, have been without a contract for almost a year.

CN shares closed down 27 cents at $56.03 on the Toronto Stock Exchange.

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Big St. Louis hotels that depend on corporate meetings and charity events for much of their business will face a lean winter and are unlikely to recover fully until 2011, a hotel analyst said Monday.

Among them is the Chase Park Plaza, the Central West End landmark that is falling short of income projections made in 2006, when real estate investment trust Behringer Harvard took over as majority owner. The $180-million deal included $95 million for an ongoing renovation.

In a conference call script attached to a quarterly financial filing last week, Behringer Harvard’s chief accounting officer Bryan Sinclair said the firm had "recognized" a $5 million reserve for an unpaid rent balance from its 5 percent partner, Kingsdell LP, which runs the Chase Park Plaza.

Kingsdell’s owner, Jim Smith, said Monday that hotel revenue is short of the projections but added that Behringer Harvard’s action is no indication the Chase Park Plaza is in financial trouble.

"The lease payments are just internal cash flow," he said. "We are 100 percent current on our debt payments. We pay all our taxes."

The complex at Kingshighway and Lindell Boulevard is comprised of 350 hotel rooms, 51 corporate apartments, 86 condominiums, meeting rooms, restaurants and a movie theater. The $4.5 million penthouse condo remains unsold but 65 percent of the condos have been purchased, Smith said.

He would not provide hotel occupancy rates but said the economic downturn and renovation of some hotel rooms had pushed down the rate. But Smith added that next year the owners will pay off the construction loan on the condo portion of the complex and "significantly pay down" the hotel loan.

Hotel analyst Gary Andreas, a partner at H&H Financial in Chesterfield, said the Chase Park Plaza is among area hotels hurting from reductions in corporate meetings.

"And a lot of charitable groups have cut back on fancy functions," he added.

Andreas said big hotels are unlikely to see a significant turnaround until late next year. Hotels in most cities, including St. Louis, look to return to normal in 2011. Chase Park Plaza appears to be performing as well as its competitors, he added.

"I’ve not heard any rumbling that they’re in trouble," Andreas said.

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Indian central bank Governor Duvvuri Subbarao prepared investors for higher interest rates in coming months, shifting policy focus toward stemming inflation as the world emerges from the worst recession since the 1930s.

Subbarao yesterday said “it may be appropriate to sequence the ‘exit’ in a calibrated way” from record monetary stimulus, and told banks to set aside more cash in government bonds to restrain credit. The Reserve Bank of India also told lenders to hold more funds as provisions for loans to property companies.

Central bank watchers said policy makers may start raising rates at or before their next quarterly meeting, in January. India’s announcement underscored evidence of a strengthening rebound across Asia, with China projecting an acceleration in industrial production yesterday and the Bank of Japan saying the economy is improving in all of the nation’s nine areas.

“It’s absolutely critical that the monetary stimulus is withdrawn in an orderly way to curb inflation without upsetting economic growth” in India, said D. H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi. “Inflation is like a tax on the poor.”

Stocks from India to China dropped yesterday amid concern among some investors about policy makers’ steps to reverse stimulus measures. The Bombay Stock Exchange’s Sensitive Index fell 2.3 percent, the most in two months. The Shanghai Composite Index slid 2.8 percent.

Earnings Momentum

The Reserve Bank of India’s injection of 5.85 trillion rupees ($130 billion) of cash since September 2008 to sustain credit to companies and households has paid off. Companies from automobile makers Tata Motors Ltd. and Maruti Suzuki India Ltd. to home appliance firm Whirlpool of India Ltd. reported rising demand in recent weeks.

Maruti, the New Delhi-based maker of half the cars sold in India, reported that profit almost doubled last quarter on higher consumer spending. Sales at Mumbai-based Tata Motors, India’s largest truckmaker, rose in the three months through September, the longest-winning streak in at least two years, helped by a decline in auto-loan rates and increased spending by the government spurred.

Whirlpool of India, which has headquarters in New Delhi, this week said its second-quarter earnings were the highest on record.

‘Central Issue’

Now, draining the central bank’s liquidity injections has become a “central issue in our policy matrix,” Subbarao, a 60- year-old former top Finance Ministry bureaucrat who was appointed governor for a three-year term in September 2008, said yesterday. There are “definitive” signs that the economy is recovering, he said.

India’s industrial production rose 10.4 percent in August, the most in 22 months after the government announced tax cuts and the central bank cut rates and injected cash into banks since September last year. Cumulatively, the stimulus added up to more than 12 percent of the economy.

Subbarao, a career civil servant who studied under a fellowship at the Massachusetts Institute of Technology, said prospects for Indian industry are rising. The revival in Indian stock and global financial markets will spur investment, he said, maintaining a growth forecast for India’s $1 payday advance.2 trillion economy at 6 percent “with an upward bias.”

He raised the inflation estimate to 6.5 percent from 5 percent by March 31. The benchmark wholesale inflation rate was 1.21 percent in the week ending Oct. 10, a sixth straight gain.

‘Nervous’ Markets

“Inflation pressures are mounting,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd. in Hong Kong. “Markets are nervous that the stimulus will be taken away — much of the gains in stocks and other assets were driven by the liquidity from the stimulus.”

The Sensitive Index is up 70 percent this year, outpacing the MSCI World Index’s 34 percent advance in the same period. Elsewhere in Asia, the Shanghai Composite Index has climbed 66 percent and Hong Kong’s Hang Seng 54 percent over the same period, contributing to concerns that asset-price bubbles will threaten to roil economies in the region.

The Reserve Bank of Australia raised rates three weeks ago, citing costlier real estate, and Bank of Korea Governor Lee Seong Tae said Oct. 23 that keeping rates at a record low may not be healthy for the economy. Regulators from Hong Kong to Singapore to South Korea have also told banks in recent weeks that they need to tighten lending standards.

In Europe, Norway’s Norges Bank may become that continent’s first central bank to increase interest rates today, according to the median forecast in a Bloomberg News survey.

Policy Rates

The RBI kept its policy rates unchanged yesterday, with the reverse repurchase rate at 3.25 percent, the repurchase rate at 4.75 percent and the cash reserve ratio at 5 percent, in line with the median forecast of 24 economists surveyed by Bloomberg News.

“By revising the inflation target, the RBI has clearly highlighted that inflation will be an area of concern going forward,” said Yashika Singh, a Mumbai-based economist at Dun & Bradstreet Information Services India Ltd. Singh expects the central bank to rely on higher cash reserve ratio to contain inflation before raising interest rates. She expects a 25 basis point increase in the reserve ratio in December.

Goldman Sachs Group Inc. predicted a reverse-repurchase rate increase at the January meeting, and recommended that investors buy the rupee against the dollar. India’s currency will appreciate to a projected 44 per dollar in three months and 43.4 in six months, according to the note by Goldman Sachs economist Tushar Poddar sent to clients yesterday.

The rupee closed at 46.925 yesterday in Mumbai.

With yesterday’s move, Indian banks will be required to hold 25 percent of their deposits in government bonds, up from 24 percent previously. That won’t affect their ability to lend because most have holdings amounting to 27.6 percent, Subbarao said. Bonds climbed the most in more than a month yesterday.

“The economy is on a comeback track,” Finance Secretary Ashok Chawla said in New Delhi yesterday. “At this stage, the central bank’s done what it needs to contain inflation and support growth.”

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Hirohisa Fujii, Japan’s next finance chief, will draw on his two decades at the Finance Ministry to try to wrest budgetary control from bureaucrats and fund his party’s promises without swelling the public debt.

Fujii, 77, told reporters in Tokyo that Democratic Party of Japan leader Yukio Hatoyama offered him the post. Hatoyama will announce his Cabinet after parliament approves him as prime minister today.

The DPJ, which unseated the Liberal Democratic Party that held power for all but 10 months since 1955, has pledged to support households battered by two decades of economic stagnation. If confirmed, Fujii’s biggest challenge will be convincing investors he can uphold pledges from providing childcare handouts to abolishing highway tolls without blowing out the largest debt burden in the industrialized world.

“Japan’s fiscal conditions are worsening considerably and there are concerns over what’s going to happen to the nation’s public debt, depending on who will be the new finance minister,” said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo.　“In that sense, Fujii is a good choice as he gives an impression that he will manage debt properly.”

Fujii said he was also asked to head a government tax panel. Unlike his predecessor, Kaoru Yosano, he won’t hold a second portfolio as minister for banking regulation. Shizuka Kamei, leader of DPJ coalition partner the People’s New Party, said yesterday he accepted an offer to become financial services minister.

Served Before

Fujii was an LDP lawmaker from 1977 until he left the party in 1993 to participate in a coalition that toppled the ruling party. He served as finance minister in that government, which lasted only 10 months, and worked with Treasury officials including current Secretary Timothy Geithner and former head Lawrence Summers during his term.

Before entering politics, Fujii spent 21 years at the Finance Ministry, where he rose to the position of budget examiner. Hatoyama asked Fujii not to retire from politics before the Aug. 30 election, sparking speculation he will take the finance portfolio.

His most immediate issue will be compiling next year’s budget, a process that has been delayed because the DPJ has vowed to take control over the process from bureaucrats to prevent spending it calls wasteful.

Budget Test

“Budget compilation will be the first real test for the DPJ,” said Soichi Okuda, chief economist at Sumitomo Research Institute in Tokyo. “If they can wrest control of the budget from bureaucrats as they have promised, they’ll be able to cut wasteful spending. If not, they’ll need to rely on bond sales.”

The DPJ wants to reduce the bureaucracy’s role in setting policy. Economists say Fujii’s background will help the party come good on that promise without turning the ministry against the government.

“He may be able to control bureaucrats well and probably won’t hurt the market by doing anything extreme,” said Nobuto Yamazaki, executive fund manager at DIAM Asset Management Co. in Tokyo.

Japanese government bonds have remained little changed since the election, with 10-year notes yielding 1.32 percent at 11:53 a.m. in Tokyo from 1.315 percent before the Aug. 30 vote. The yen traded at 90.98 per dollar, close to a seven-month high of 90.21 reached two days ago.

Yen Intervention

Fujii indicated this month that he is opposed to buying or selling the yen to influence currency levels, saying the government should only step into the foreign-exchange market “when speculative funds cause abnormal movements.”

Any currency intervention should be done in concert with other governments, he said in a Sept. 3 interview. Japan hasn’t entered the foreign-exchange market since it sold yen in 2004.

The new ruling party must also deal with record unemployment and deflation that threaten to derail a recovery from the nation’s worst postwar recession. The jobless rate rose to 5.7 percent in July and consumer prices plunged an unprecedented 2.2 percent.

Streamlining spending and finding money for all of Hatoyama’s election promises won’t be easy. The party plans to increase spending on child care and tuition aid, lower gasoline taxes and eliminate highway tolls. To support workers, it promises to provide 100,000 yen ($1,100) a month for job seekers enrolled in training, raise the minimum wage and expand employment insurance.

Won’t Be Easy

Hatoyama wants to do those things while keeping new bond sales within the 44.1 trillion yen, almost a tenth of gross domestic product, allocated for the year ending March 2010. The DPJ plans to tap unused money from outgoing Prime Minister Taro Aso’s 13.9 trillion yen extra budget instead of selling debt.

Fujii said on Sept. 3 that the incoming government may redeploy as much as 5 trillion yen in stimulus spending currently slated for “wasteful” programs, including scrapping plans for a “manga” comic-book museum.

Even if the DPJ is able to pull together enough money this year, the magnitude of its programs will make it hard to compile subsequent budgets, economists say.

The party says it needs to find 7.1 trillion yen to fund its election pledges for the year starting April 1. That number would swell to 16.8 trillion yen by fiscal 2013, according to its campaign manifesto.

Japan’s public debt is already approaching 200 percent of GDP and finances are being squeezing by falling tax receipts. The DPJ has also pledged not to raise the consumption tax from the current 5 percent, limiting its funding options.

“No matter who is finance minister, the party will manage in the first year, but it’s going to be impossible not to increase new bond sales beyond 2011,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Ultimately they’ll be forced to choose between raising the sales tax or seeing public finances collapse.”

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Finance chiefs from the Group of 20 vowed to sustain efforts to end the worst global recession since the Great Depression to nurture an emerging economic recovery.

U.K. Chancellor of the Exchequer Alistair Darling and German Finance Minister Peer Steinbrueck were among the officials who began talks in London saying it was premature to unwind emergency measures to fight the crisis. They promised to start outlining how they would eventually do so.

“The time to start implementing an exit strategy is when you have seen the job through,” Darling said in an interview yesterday. “One of the biggest risks is saying the job is done, now we can throttle back. We have made those mistakes before.”

The G-20 policy makers arrived in the U.K. as a report in the U.S. signaled recovery will be sluggish. Unemployment reached a 26-year high in August even as the pace of job losses slowed. Such mixed signals are preventing them from declaring victory over recession and starting to peel back their record low interest rates and $2 trillion of fiscal stimulus.

“We are far from through these uncertain times,” Canadian Finance Minister Jim Flaherty told reporters. “Any potential recovery at this stage is fragile and subject to further shocks.”

The Paris-based Organization for Economic Cooperation and Development cut its estimate for contraction this year in the world’s leading industrialized countries to 3.7 percent from 4.1 percent, while predicting a “modest” return to growth.

‘Real Danger’

Such a situation prompted International Monetary Fund Managing Director Dominique Strauss-Kahn to note a “real danger” that policy makers will cut back too soon and imperil expansion.

“Given the fragility of the recovery, there are risks that it could stall,” Strauss-Kahn said in Berlin before heading to London. “Premature exit from accommodative monetary and fiscal policies is a principal concern.”

The IMF raised its forecast for global growth next year to 2.9 percent from the 2.5 percent it predicted in July, a G-20 government official said. The Washington-based lender also reduced its projection for the global contraction this year to 1.3 percent, from a 1.4 percent drop, the official said on condition of anonymity, citing a paper prepared for the G-20 auto loan interest rates.

Still, officials should start discussing how to remove the “enormous liquidity” in financial markets before it spurs inflation and government borrowing costs, Steinbrueck said.

Exit Preparation

“It’s necessary to prepare for a situation when the economic and financial crisis hopefully will be overcome,” Steinbrueck told reporters. “One can’t talk about the concrete point in time just yet.”

Crisis policies will have to stay in place for another six months, Russian Finance Minister Alexei Kudrin said in an interview.

Countries should ultimately coordinate when the time comes to withdraw stimulus, French Finance Minister Christine Lagarde said. Failure to unite would risk fanning inflation, leading to uneven debt burdens or distorting markets.

“It should be done together,” Lagarde said. “What the timing will be for each country will depend on the fabrics of the economy, on the status of where it is, on its size. We must have this coordination amongst ourselves.”

Central bankers are also planning for the exit — without rushing toward it. European Central Bank President Jean-Claude Trichet yesterday used a speech in Frankfurt to outline how the ECB’s stimulus measures will eventually be taken back. Many of its loans to bank will “naturally unwind” as they mature and demand for additional cash wanes, he said.

‘Premature’

“Notwithstanding some recent signs of improvement in the economic outlook, it is premature to declare the financial crisis over,” Trichet said. “Stressing the importance of the exit strategy should not be confused with its implementation.”

The G-20’s policy makers are meeting through today to shape an agenda for a Pittsburgh summit of their leaders in three weeks. They will release a statement about 4 p.m. in London.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.

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