(Adds Dentsu results)
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 if the government can protect them from the financial crisis.
The fall in confidence is another sign that 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 stronger yen and the global slowdown took hold, making companies hesitant to boost 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 an economy 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.
Underscoring the pain felt across Japan's corporate sector, Dentsu Inc, the nation's largest advertising firm, reported a 17.5 percent drop in quarterly profit on Wednesday and cut its annual outlook as growing economic uncertainty makes its clients wary of spending.
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 share prices, pushing Tokyo's Nikkei average 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.
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 24.8 in October, the lowest in five and a half years, in a sign that actual livelihoods and 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 recession, Japan's government has adopted a stimulus package including fiscal spending of around 5 trillion yen ($51 billion), but that has done little to soothe market jitters over the nation's outlook.
The Bank of Japan, which had opted out of coordinated interest rate cuts earlier, joined the global trend late last month by cutting its key rate to 0.30 from 0.50 percent. ($1=97.80 Yen) (Additional reporting by Mariko Katsumura and Yasuhiko Seki; Editing by Michael Watson)