Japan Heads for Worst Postwar Slump

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Bloomberg.com: Worldwide: "Jan. 30 (Bloomberg) -- Japan headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December, unemployment surged and households cut spending.

The drop in production eclipsed the previous record of 8.5 percent set only a month earlier, the Trade Ministry said today in Tokyo. The jobless rate soared to 4.4 percent from 3.9 percent, the biggest jump in 41 years.

Recessions in the U.S. and Europe and a slowdown in China have smothered demand for Japanese cars and electronics. Toshiba Corp., which is firing 4,500 workers, yesterday forecast a record annual loss and said it will delay building a chip factory. Honda Motor Co. this week widened production cuts.

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

The Nikkei 225 Stock Average sank 3.4 percent at the morning close in Tokyo, led by Toshiba and Nintendo Co., which cut its profit forecast by a third yesterday. The Nikkei has fallen 10.1 percent this year, extending last year’s record 42 percent drop."

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