By Bob Blandeburgo Associate Editor Money Morning

Stimulus measures in Japan helped the world’s second-largest economy grow at its fastest pace in more than two years, but it’s unlikely policymakers will reduce spending despite the nation’s rapidly growing debt.

Gross domestic product (GDP) in Japan grew at 4.8% annual rate in the third quarter, surpassing all the forecasts of 20 economists polled by Bloomberg News. That follows a revised gain of 2.7% in the three months ended June 30, according to Japan’s Cabinet Office. Japan’s economy grew 1.2% on a quarterly basis.

“The turnaround in public investment has definitely contributed to the rebound in GDP, so if they do start to cut it’ll weigh on growth,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG (NYSE ADR: CS), told Bloomberg.

Stimulus measures around the world helped Japan’s exports grow 6.4%, but as global economies withdraw stimulus measures,

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Asian economies are recovering faster than previously thought and will lead the charge out of the worst global downturn since the 1930s, according to new forecasts by the Asian Development Bank (ADB) – a Manila-based institution that promotes economic and social progress in the Asia-Pacific region.

After slashing its forecast for the region in March, the ADB reversed course in its updated Asian Development Outlook (ADO) 2009. The bank said developing economies in Asia would grow by 3.9% this year, up from its previous forecast of 3.4%.

“Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown,” said ADB Chief Economist Jong-Wha Lee.

However, the growth will not be evenly distributed. Economic growth in East Asia will be driven largely by China’s dynamic economy. But economic growth in Southeast Asia will be sluggish, because the recoveries of Vietnam and

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The number of traders betting that oil prices will drop outnumbers the number of traders who believe they will rise by the largest margin ever. Some analysts believe prices will fall significantly lower in the near future – at least into the low $60 a barrel range – after soaring to $75 a barrel in August.

Supply has outrun demand this year as a global recovery has yet to accelerate. Yet, oil prices more than doubled from February to August and are up about 50% from where they started the year.

Now, many traders are positioning themselves to profit from a pullback. The gap between prices of options betting on a decline in prices and those that would profit as a result of a rise in oil has widened to a record 10 percentage points, according to five years of data compiled by Banc of America Securities-Merrill Lynch.

Put options, which give traders

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China’s economy grew by 7.9% in the second quarter, exceeding most analysts’ expectations, and lending credence to Beijing’s goal of 8% annual growth. Now, with the nation awash in liquidity and the economy picking up steam, the only task ahead of the central government is deciding when to rein in lending and let the economy stand on its own two feet.

The momentum behind China’s economy is staggering.

“China is increasingly becoming a responsible citizen in the global community,” economist Allen Sinai of Decision Economics told The Associated Press. “No longer lawless, no longer difficult to deal with, much more responsible. It is now a powerhouse among economies and finance. And it’s a rich country.”

In just the past few weeks, two of the world’s key global institutions – the World Bank and the Organization for Economic Cooperation and Development (OECD) – and a large swath of investment banks raised their 2009

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Here are the stocks added to the Zacks #1 Rank ("strong buy") List today:

Electrolux AB (ELUXY) APAC Customer Services Inc (APAC) BCE Inc (BCE) BNP Paribas SA (BNPQY) Cardtronics Inc (CATM) Clearwater Paper Corp (CLW) Comcast Corp (CMCSK) Credit Suisse Group AG (CS) Diageo Plc (DEO) Dollar Tree Inc (DLTR) Flamel Technologies SA (FLML) Hill-Rom Holdings Inc (HRC) Jones Apparel Group Inc (JNY) Legal & General Group Plc (LGGNY) Memsic Inc (MEMS) Netflix Inc (NFLX) Novo Nordisk A/S (NVO) Ocwen Financial Corp (OCN) Pegasystems Inc (PEGA) Rent-A-Center Inc (RCII) ScanSource Inc (SCSC) Signet Jewelers Ltd (SIG) Universal Electronics Inc (UEIC) Wyndham Worldwide Corp (WYN) View the entire Zacks #1 Rank List.

"ELUXY" Free Stock Analysis: Buy? Sell? Hold?...

Here are the stocks added to the Zacks #1 Rank ("strong buy") List today:

Alliant Techsystems Inc (ATK) Almost Family Inc (AFAM) American Public Education Inc (APEI) American Technology Corp (ATCO) Anaren Inc (ANEN) APAC Customer Services Inc (APAC) Banco Latinoamericano de Exportaciones (BLX) Big Lots Inc (BIG) Blackrock Kelso Capital Corp (BKCC) BNP Paribas SA (BNPQY) China Telecom Corporation Ltd (CHA) Flamel Technologies SA (FLML) Hellenic Telecom Organization SA (OTE) Iconix Brand Group Inc (ICON) J Crew Group Inc (JCG) Koppers Holdings Inc (KOP) Legal & General Group Plc (LGGNY) Memsic Inc (MEMS) Nu Skin Enterprises Inc (NUS) Rolls-Royce Group Plc (RYCEY) Sara Lee Corp (SLE) Spectra Energy Partners LP (SEP) Tutor Perini Corp (TPC) View the entire Zacks #1 Rank List. ...

Here are the stocks added to the Zacks #1 Rank ("strong buy") List today:

Alliance Financial Corp (ALNC) BNP Paribas SA (BNPQY) Calamos Asset Management Inc (CLMS) Eastman Chemical Co (EMN) Flamel Technologies SA (FLML) Gastar Exploration Ltd (GST) Kirkland's Inc (KIRK) O'Reilly Automotive Inc (ORLY) Perdigao SA (PDA) Perfect World Co Ltd (PWRD) Rolls-Royce Group Plc (RYCEY) Smart Balance Inc (SMBL) Star Bulk Carriers Corp (SBLK) Telecom Italia SpA (TI) Tele Norte Leste Participacoes SA (TNE) Universal Electronics Inc (UEIC) View the entire Zacks #1 Rank List.

"ALNC" Free Stock Analysis: Buy? Sell? Hold?"BNPQY" Free Stock Analysis: Buy? Sell? Hold?"CLMS" Free Stock Analysis: Buy? Sell? Hold?"EMN" Free Stock Analysis: Buy? Sell? Hold?"FLML" Free Stock Analysis: Buy? Sell? Hold?...

Banks are starting to trust each other more. The three-month Libor – which sets the borrowing cost of $360 trillion in financial products – dropped the most in four months on Monday.

This from Bloomberg:

The London interbank offered rate, or Libor, for three-month dollar loans declined three basis points today to 0.75 percent, the British Bankers’ Association said, bringing its drop in the past two days to seven basis points, the most since Jan. 13. The rate has decreased in each of the past 35 days.

“The tension has disappeared and we are gradually normalizing,” said Patrick Jacq, a senior fixed-income strategist in Paris at BNP Paribas SA, the biggest French lender. “There’s less stress in the market and banks know they will get liquidity.”

That’s a massive drop from the three-month LIBOR peak of 4.82% back in October.

The TED spread has also dropped. This key credit indicator, which measures the

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Japan’s Cabinet Office said today (Wednesday) that economic output fell to its worst levels ever, tumbling an annualized 15.2% in the first quarter, as the worst recession in 60 years hammered exports and consumer demand.

Despite the disturbing news from Japan - the world’s second largest economy - some analysts are optimistic that the record gross domestic production (GDP) decline may be the low point, with business activity picking up from here.

“There was a collapse across the board,” Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo, told Bloomberg News. But there’s “light at the end of the tunnel,” he said, adding that he believes the economy will rebound this quarter as companies replace inventories and stimulus plans begin to take effect.

Prime Minster Taro Aso has set forth the largest stimulus plan in Japanese history, promising to pump $160 billion into the economy, mostly

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