* Reserve Bank of Australia cuts rates for 4th month in a row
* Japan central bank meets to ease corporate funding burden
* Global stocks tumble after U.S. declared in recession
By Wayne Cole
SYDNEY, Dec 2 (Reuters) - Australia slashed rates by a full percentage point on Tuesday and Japan's central bank met to consider its response to an acute cash squeeze, kicking off another global push to shore up economies and soothe markets.
The moves comes after stock markets around the world plunged, jolted by a report that confirmed the U.S. economy was in the third-longest recession since the Great Depression.
Japanese central bankers huddled in an emergency meeting to devise ways to get funding to capital-starved firms, while the persistent financial crisis kept pressure on policymakers to go on cutting borrowing costs and on investors to seek safety first.
Any optimism built up after last week's biggest global stock market rally in at least 20 years was dashed by a series of grim reports on factory activity in China, Europe and the United States and stark warnings from policymakers.
The National Bureau of Economic Research, a private research group that makes the final call on when U.S. recessions start and end, declared that one began in December 2007.
The Reserve Bank of Australia cut its cash rate by a full percentage point to 4.25 percent, a bigger margin than the market had expected, and said the perilous state of the global economy left the door open for yet more cuts.
"The economy is poised on a knife edge and the RBA is going to keep cutting until it starts to get traction with consumers and housing," said Macquarie senior economist Brian Redican.
Central banks in Britain, the euro zone and New Zealand, all mired in recessions, will almost certainly cut interest rates as well later this week, hoping to get ahead of rapidly cooling consumer prices that raise the spectre of deflation.
Federal Reserve Chairman Ben Bernanke said in a speech on Monday further cuts in the benchmark rate below 1 percent were "certainly feasible." He also said the central bank could take steps such as buying "substantial quantities" of longer-dated U.S. government debt or making more targeted injections of liquidity into the market.
MORE IMBALANCES
However, such unusual measures could ultimately lead to other problems because market prices would be distorted by official tinkering, economists warned.
"The longer-term implications of these actions, if prolonged, might also lead to unintentional financial imbalances," said Thomas Lam, senior treasury economist with United Overseas Bank in Singapore, in a note.
Companies around the world were scrambling to cut costs and keep expectations about their profits realistic as market conditions grew volatile after a brief respite last week.
Stocks tumbled across Asia on Tuesday on expectations for more economic gloom. Japan's Nikkei share average fell 4.6 percent as the stronger yen, reflecting investor retreat from risky assets, added to exporters' pain. Hong Kong's Hang Seng index led the regional decline, falling 5 percent.
Toyota Motor Corp said it would cut management bonuses by 10 percent as the global economic slowdown deals a painful blow to the world's no. 1 carmaker, which will reportedly at the end of this month suspend production for two days at some plants .
The Bank of Japan called an emergency meeting to find ways to cut corporate borrowing costs.
Japanese Finance Minister Shoichi Nakagawa said he welcomed any steps the Bank of Japan takes to ease the funding burden on companies, adding it would be beneficial for Japan if the government and the BOJ worked as one on monetary policy.
Meanwhile, the stability of some of the world's leading developed economies continued to be called into question given the rising bill of trillions of dollars of rescue packages and bank capital injections that so far have barely had an impact on the sharp global slowdown.
Euro zone finance ministers were in Brussels to hash out how to enact the European Commission's 200 billion euro ($252 billion) plan to pull out the bloc from recession. But Germany, Europe's biggest economy, bristled at suggestions that it should spend more.
U.S. President-elect Barack Obama will likely push for additional fiscal stimulus once he takes office in January, though he has not yet put a price tag on one. Democrats in the House of Representatives were talking about a package in the range of $500 billion.
Across the border, Canada's Prime Minister Stephen Harper could be toppled in a confidence vote set for Monday after drawing fire from opposition for not doing enough to help the country's economy.
China, widely expected to remain the main driver of the global economic growth next year, was also under pressure to do more to counter plummeting demand and rising unemployment.
The world's fourth-biggest economy should take further steps, including cutting interest rates and taxes as well as increasing investments aimed at spurring domestic consumption, a state think-tank said on Tuesday. The Shanghai Securities News cited unidentified sources as saying that Beijing would set a target of 8 percent for economic growth in 2009.
Growth in total output slowed to 9 percent in the third quarter from 10.1 percent in the second. (Additional reporting by Reuters bureaus worldwide; Writing by Kevin Plumberg; Editing by Tomasz Janowski)