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World bank cuts economic forecasts? Japan’s  survey showed less pessimism at big Japanese manufacturing firms in the three months to June. Meanwhile German business sentiment rose to a seven-month high in June although analysts said plenty of risks remained given that expectations fueled the rise in sentiment.

Despite initial signs of a weakening in the pace of economic decline, policymakers must remain alert, European Central Bank President Jean-Claude Trichet said. “While there are first signs that the pace of economic weakening is decelerating, we must remain alert. We are in uncharted waters, and there are still risks of a sudden emergence of unexpected financial turbulence,” he said.

Trichet’s caution chimed with that of Angel Gurria, the head of the Organization for Economic Cooperation and Development. “We see a very difficult 2009, with negative growth in the OECD area. Unemployment problems are going to continue to linger,” he told Reuters television in an interview on the sidelines of a conference in Paris.

Adding to those wary comments, the World Bank said prospects for the global economy remain “unusually uncertain” as it cut 2009 growth forecasts for most economies.

Governments around the world have borrowed hundreds of billions of dollars to fight the worst economic crisis in decades, providing incentives for businesses and consumers to spend and embarking on big infrastructure programs to create jobs and stimulate activity.

They should stick to spending programs to reignite growth because their economies are still weak in spite of signs that the worst of the crisis may be past, World Bank Chief Economist Justin Lin said in an interview with Reuters. Lin also said he was concerned about rising borrowing costs and weak external financing conditions for the emerging economies of Europe and Central Asia.

Like the ECB, the U.S. Federal Reserve has cut interest rates to record low levels and used unorthodox means to pump more money into the system.

The Fed’s interest rate setting committee meets on Tuesday and Wednesday and economists polled by Reuters see no chance that the Fed will raise its benchmark short-term interest rate from the current level near zero. The Fed is also seen unlikely to ramp up its purchases of U.S. government and mortgage-linked debt as investor focus shifts to inflation on evidence that the economy is stabilizing.

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The current hot news is that NASA has postponed the launch of  Endeavour space shuttle after engineers failed to fix a hydrogen leak during fueling.  Endeavour is to make a 16-day visit to the International Space Station to complete the assembly of the $1 billion Japanese Kibo research facility.

Today’s takeoff from Kennedy Space Center in Cape Canaveral, Florida, was canceled at 1:55 a.m. local time because of the leak in a system that vents excess hydrogen as the shuttle’s external fuel tank is being filled with more than 500,000 gallons of liquid hydrogen and liquid oxygen.

Engineers still don’t know the cause of the leak, which is no larger than a pinhole. “It’s very small, but it’s something we have to be concerned about,” Scolese said via video conference from Kennedy.  The spacecraft’s June 13 launch was postponed because of a leak in the same system, which carries the excess hydrogen gas away from the launch pad to an area where it can be safely burned off.

The shuttle can’t take off between June 22 and July 10, when the orbit of the space station would expose the spacecraft to too much sunlight and overheat the vessel’s systems. In March, the launch of the shuttle Discovery was postponed after technicians found a leaky valve in the same system. That mission, which went ahead March 15 to March 28, had already been delayed several times so engineers could test valves that help deliver hydrogen to the engines at the correct pressure.

NASA is scheduled to launch the Lunar Reconnaisance Orbiter and Lunar Crater Observation and Sensing Satellite from Cape Canaveral at 5:12 p.m. local time tomorrow. That mission, which will survey the lunar surface and seek traces of water as part of a longer-term plan to return American astronauts to the moon, had already been delayed a day because of the postponement of the Endeavour launch.

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Bangladesh has ordered high security across the country amid fears of possible attacks by Islamists or criminal gangs. The alert comes as the south Asian country prepares to put on trial later this month dozens of people alleged to have committed war crimes during Bangladesh’s 1971 war of independence.

Security officials also fear a backlash following the recent arrest of three close associates of underworld don Daud Ibrahim. They confessed to a judicial magistrate of having run a clandestine criminal network for Daud.

One of the detainees told police that about 100 Daud agents were active in Bangladesh, an overwhelmingly Muslim country of more than 140 million people and already facing militancy by the Jamaat-ul-Mujahideen (JMB) and other outlawed groups. The JMB is blamed for a series of bomb attacks in 2005 that killed dozens of people, including lawyers, judges and police in 2005. Police and intelligence officials say they have been regrouping since Prime Minister Sheikh Hasina took office in January.

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