In Paris, France's socialist-led government said it was revising down its growth forecast for 1999 to 2.7 per cent from 2.8 per cent after a 3.1 per cent growth this year.

``For 1999, we have to take account of an uncertain international situation and I want to be cautious,'' finance minister Dominique Strauss-Kahn told reporters after the government approved a budget for 1999.

In Rome, Italian prime minister Romano Prodi said Italian gross domestic product was likely to grow by around 2 per cent in 1998 rather than the 2.5 per cent initially expected because of economic crises in Asia and Russia.But he told Rai State Radio that he thought both Europe and the United States were in good economic health. ``I do not see a recession, a 1929, a tragedy.''

Analysts agreed, saying that strong domestic demand andplans for economic and monetary union would largely shield the European economy from the Asian turmoil which has spread across emerging economies to Russia and Latin America.

``We are not talking about going from an optimistic outlook to an overly pessimistic one,'' said Banque Nationale de Paris economist Cyril Beuzit.France was the first of the big European economies to trim its 1999 growth forecast, and economists expect Germany to follow, but not until after its September 27 election.

``I think nobody wanted to do it (cut their forecast) because it has a kind of snowball effect,'' said Deutsche bank economist Patrick Mange,reporting lower profits due to Asian worries and low commodity prices.

Meanwhile, Japanese share prices reversed early gains and ended 0.6 per cent lower Thursday despite the Bank of Japan's move to lower interest rates, brokers said.

The central bank's decision to guide the overnight interbank rate to 0.25 per cent is not expected to benefit the overall economy, brokerssaid.``The BoJ move yesterday did not change trading conditions at all,'' a Universal Securities dealer said. The key Nikkei stock average of the Tokyo Stock Exchange lost 89.51 points to finish at 14,666.03.

The broader Topix index of all first-section issues fell 6.10 points to 1,109.91 points, with an estimated 370 million shares changing hands against 417.7 million the previous day. Stocks fell into the negative territory in late trading as some bank shares extended losses, brokers said.