Japan in crisis as recession deepens

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Honda reported an 89% slump in profits while rival carmaker Toyota warned losses this year will be far greater than originally expected.

Grim news from Mizuho, Nintendo, Toshiba, Hitachi and Daiwa, and figures showing a record fall in factory output and soaring unemployment, added to the gloom.

"Japan's economy is falling off a cliff," said Junko Nishioka, an economist at RBS Securities Japan in Tokyo. "There's really nothing out there to drive growth."

The Nikkei 225 Average of leading shares in Japan closed down 226.44 points at 8149.01 , leaving it down 9.8% on the month — its second-worst start to a year.

The crisis in Japan is being felt in the UK. The International Monetary Fund this week said Japan's gross domestic product will shrink 2.6% this year, with only the UK having a bleaker outlook — a decline of 2.8% — among the major industrialised nations.

The Honda factory in Swindon closed for four months today, one of the longest shutdowns in Britain's recent industrial history. More than 4000 workers will receive their full basic pay for the first two months and 60% after that.

Honda, which has been hit by a downturn in the car market at home as well as in the UK and beyond, said profits in the last three months of 2008 were just 20.24 billion yen (£158.7 million), compared with 200.01 billion yen a year earlier. It cut its annual profits forecast in half.

Toyota, until last year the most profitable carmaker in the world, last month projected its first-ever operating loss, of 150 billion yen. Company sources today said the loss could reach 400 billion yen.

The pain went beyond the car makers. Japanese bank Mizuho, which is cutting almost 100 of its 770 staff in London, posted a loss of 50.5 billion yen for the first nine months of the year.

Shares in Toshiba and Nintendo tumbled more than 12% after both reduced earnings forecasts. Broker Daiwa posted its biggest quarterly loss in more than seven years, of 53 billion yen, on a slump in investment banking, and Hitachi forecast a 700 billion yen annual loss.

Figures today showed Japanese factory output slumped by a record 9.6% in December while unemployment soared to 4.4% from 3.9%.