The Cabinet Office's statistics show that the Japanese economy is in a serious recession. In the October- December quarter, gross domestic product in real terms shrank by 3.3 percent from the previous quarter or an annualized 12.7 percent.

This figure is only slightly less than the worst-ever annualized shrinkage of 13.1 percent recorded during the first oil crisis in the January-March quarter of 1974. As Economic and Fiscal Policy Minister Kaoru Yosano said, Japan is now facing the greatest economic crisis since the end of World War II.

Alarming is the fact that the Japanese economy's fall is much more severe than that of other developed countries. By comparison, U.S. real GDP shrank an annualized 3.8 percent in the fourth quarter of 2008 and the real GDP of the euro-zone economy fell by an annualized 5.9 percent.