Asian trade: Asian markets are trading back into the red territory, as bad news seems to have reached investor’s ears again. U.S. futures also moved lower during the Asian session.

A report showed that the Japanese economy shrank 3.2% in Q4, less than expected. This was the biggest quarterly drop since 1974, as spending and exports plunged, affected by the credit crisis. Forecasts are that the Japanese economy will maintain this contraction pace during 2009, as the world demand plunges and the Japanese corporate environment struggles to survive. Even though Japan is the second largest economy in the world, it still has some major structural problems, which affected it over the past two decades and will probably act as a huge drag forward.

In the U.S., the series of bailouts/capital injection continue. Freddie Mac said that it would need another $31 billion from the Treasury to survive in the first few months of 2009. The mortgage company reported a $23 billion loss in Q4, following a similar result into the third quarter.

Freddie Mac and Fannie Mae control the vast majority of the U.S. mortgage market. It is said that the two companies control $5 trillion of house mortgages together, basically having the biggest influence over the U.S. housing market. As such, Freddie and Fannie are crucial for the current administration to support the recovery of the real-estate market. However, as some have stated, many of the decisions taken by Mr. Obama’s team will noticeably affect the incomes of the two companies.

Tonight, the Nikkei fell 83.56 points (1.13%) to 7,292.56. The Australian S&P slipped 3.70 points (0.11%) to 3,240.70.  

Crude oil traded flat in the Asian session. Crude oil for April delivery fell $0.10 to $42.90.

Gold strengthened as the Asian markets decline. Bullion for immediate delivery gained $1.00 to $910.40.