Figures leaked from the Japanese government suggest that the unemployment rate moved up from 4.9% to 5.0% in July thanks to almost a million redundancies in the last few months. The news, coupled with bad trading results, sent the Nikkei 225 index down 2.36% on Thursday, 23 August.

If, as expected, GDP falls again in the third quarter the country will officially be in recession once more. All this comes at a bad time for prime minister Junichiro Koizumi, who is trying to introduce a raft of reforms aimed at restructuring Japan’s battered economy.

Japanese exports are suffering on two fronts: the weak demand from the US, and a strong Yen which means products from other Asian countries such as China and South Korea become more competitive.