Japan is in Recession China next

Japan became the latest major economy to fall into recession on Monday with France close behind, and the IMF said it needed at least $100 billion to fight an economic crisis enveloping the world.

Meanwhile, the battered auto industry came into focus. The U.S. Senate was to begin debating a bailout later in the day, Germany was to hold talks with General Motors unit Opel, and Japan's Toyota came under ratings scrutiny.

Wall Street looked set for a poor start to the week to follow sharp losses on Friday and European shares were down 2 percent.

In something of a surprise, figures showed Japan, the world's second-biggest economy, sliding into its first recession in seven years in the third quarter as financial crisis curbed demand for Japanese exports.

The 0.1 percent contraction in July-September was worse than consensus forecasts.

The euro zone is also in formal recession, with two consecutive quarters of contraction, Britain and the United States are on the brink and China is slowing sharply.