Standard & Poor's said that Japan's recession looks set to be the worst since World War II with its economy expected to contract by 4% in 2009. It added that "The outlook for Japan remains bleak with another annualized double digit contraction expected this quarter."

Mr Takahira Ogawa analyst at S&P said that "Japan now looks very likely to suffer its worst recession since World War II. The business climate for Japanese corporations is deteriorating dramatically amid a sharp decline in demand for products. With corporate giants including Toyota Motor and Sony sinking into the red, Japan's manufacturing sector as a whole may record a fiscal year loss."

He added that "Government action aimed at addressing the nation's economic woes has been relatively ineffective. The government is hamstrung by the stalemate in Japan's parliament and by the nation's weak fiscal position."

It may be noted that Japan's economy shrank at an annualized pace of 12.7% in the fourth quarter of 2008, its worst performance since 1974. The government has already warned that the economic crisis is the worst since World War II.

(Sourced from www.afp.com)