By Yuzo Saeki TOKYO, Nov 12 (Reuters) - Japanese consumer confidence hit an all-time low in October, a government survey showed on Wednesday, as job fears weigh and consumers doubt whether the government can protect them from the financial crisis. The slide in confidence is another sign that the global market turmoil is spreading quickly, with the economies of Japan and some developing nations heading into recession, prompting central banks to cut interest rates. Japanese exports, a key driver of the world's second-largest economy, tumbled in the first 20 days of October as the strong yen and the global slowdown took hold, making companies hesitant about boosting wages, to the dismay of households. "Recent declines in gasoline prices will likely improve consumers' purchasing power and help ease the burden on households in the near-term," said Takeshi Minami, chief economist at Norinchukin Research Institute. "But looking ahead, looming anxiety about job security and wages are expected to weigh heavily on consumer spending." An index measuring sentiment for Japanese households, which includes people's views on incomes and jobs, fell to 29.4 in October from 31.4 in September, hitting the lowest level since the survey began in 1982. That bodes ill for personal consumption, which makes up 55 percent of Japan's economy, which is on the brink of recession. Japan is not alone. The International Monetary Fund forecasts that developed economies will shrink in 2009 for the first time in half a century due to damage from the credit crisis. Fears of a worldwide recession and jitters over how much this weekend's crisis summit of major economies can do to ease the pain weighed on stock prices, pushing the Nikkei average .N225 down 1.3 percent on Wednesday. Japan's economy shrank at the fastest pace in seven years in April-June, and some analysts think it may have contracted further in the following quarter, which would meet the most common definition of a recession. The median forecast in a Reuters poll for July-September gross domestic product, due out on Monday, is for an increase of 0.1 percent. [ID:nT368711] While fuel costs may be less of a concern for consumers with gasoline costs falling, they are now feeling a growing sense of unease over job security and wages, the sentiment survey showed. The job conditions index hit a five-and-a-half-year low of 24.8 in October in a sign that the actual livelihood of households, not just sentiment, was being hurt, a government official told reporters in a briefing. Japanese summer bonuses fell this year and the jobless rate has hovered near a two-year high of 4.2 percent hit in August as many companies, faced with falling revenues at home and from abroad, cut back on spending. To help ease the pain of the likely recession, Japan's government adopted a stimulus package including fiscal spending of around 5 trillion yen, but that has done little to soothe market jitters over the nation's economic outlook. The Bank of Japan, which had opted out of coordinated rate cuts earlier, joined the global trend late last month by cutting interest rates to 0.30 percent from 0.50 percent. (Editing by Hugh Lawson)

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