World markets fell yesterday, after figures showed Japan's economy contracted at its quickest pace in 35 years and a weekend summit of Group of Seven finance ministers provided few concrete proposals to count­er the economic crisis.

Drops in Europe followed losses in Asia, but trading volumes were subdued as U.S. markets were closed for Presidents Day.

Japan’s worse-than-expected fourth quarter GDP numbers were a sobering reminder of the toll the worst economic downturn in decades is having on Asia’s export-driven economies. The world’s second-biggest economy shrank 3.3 per cent from the previous quarter, or at an annual pace of 12.7 per cent.

Investors seemed disappointed after finance chiefs from the Group of Seven developed countries finished their meeting in Rome with pledges to work together to boost growth and unemployment, but stopped short of concrete measures. Increasingly, investors are unconvinced world gov­ernments are acting quickly enough to counter the economic crisis, analysts said.