Japan business sentiment worst ever

Decline in confidence at small- and medium-size companies was just as bad, the survey indicated, and companies expect business conditions to remain rough in the months ahead, with the index for big manufacturers forecast to be around minus 51 in the next survey in June.

The results of the tankan come a day after the Japanese prime minister instructed the government to draw up a third economic stimulus package, as financial data released on Tuesday indicated that the country is plunging into its worst recession in more than 50 years.

Japan’s export-dependent economy has been hit hard by the global downturn [EPA]

“Japan is still facing the economic crisis,” Taro Aso said.

“I instructed the government and ruling parties to compile steps to cope with the current economic situation, which will include submission of the extra budget.”

Aso said the stimulus package would be unveiled in mid-April.

The global slowdown has left few economies unscathed, but Japan, with its export-dependent economy, has been hit especially hard.

The International Monetary Fund (IMF) says the world’s second-largest economy will shrink by 5.8 per cent this year, far worse than expected in the US and most European countries.

Unemployment surge

According to the latest figures, unemployment in Japan rose to 4.4 per cent in February, up from January’s 4.1 per cent, with the number of jobless surging 12.4 per cent from a year ago to about 330,000.

The number of available new jobs also continued to slide, hitting a six-year low.

Other data indicated that household spending, a key measure of individual consumption, tumbled 3.5 per cent in February from a year ago.