On Tuesday it was poor industrial production and unemployment figures that filled out the current picture of the state of the Japanese economy.
Output in August fell 3.5% from July, and was down a huge 6.9% on August 2007, while August unemployment rose to a four year high of 4.2%.
Yesterday it was the widely respected and much anticipated Tankan survey of business sentiment from the Bank of Japan.
Produced quarterly and released on the first day of the new quarter, the latest report suggests that Japan's largest manufacturers have turned pessimistic about the prospects for business for the first time in five years, thanks to the impact of the financial crisis and the US slowdown on demand for exports.
We've already seen how that is actually having a knock-on effect: exports in August to the US fell a record 22% and more than offset a solid export performance to China and the rest of Asia.
The Tankan index of confidence among big cars and electronics manufacturers slid to minus 3 points in the September quarter from a positive reading of plus 5 in June, a fourth quarterly drop.
It was the first negative reading for the index since 2003 and indicates pessimists outnumber optimists.
Sentiment among large non-manufacturers, small manufacturers and small non-manufacturers was just as gloomy in the survey, with the index for each group showing the worst reading since 2003.
The fall in business sentiment came as wages fell for the first time in 8 months, mainly due to a decline in summer bonuses.
Toyota. Nissan and Honda have already trimmed car output in Japan and new figures for September for the US, just released, indicate little hope of any improvement. They had a brutal September in the US as well with sales down by 20%-37%.
So deep were the cuts in output that Japan experienced the largest drop in domestic vehicle output in a decade in August. Exports to the US plunged the most in almost five years.
This in turn is having a knock-on effect on steel demand, plastics and other commodities and suppliers across the country and on imports.
It's bad news for Australian iron ore and coal suppliers and raises more questions about the possibility of another round of price rises for the April 1 2009-10 financial year. Coal prices ex Newcastle are trading at six month lows this week.
Reports from Japan say the downturn for these big companies is starting to be passed on through medium and small companies which supply these larger businesses and employ around 70% of the country's labour.
Economists in Tokyo say the Tankan questionnaires were filled out last month when the US financial crisis was erupting with Fannie Mae/Freddie Mac being bailed out, and then the collapse of Lehman Bros, the rescuing of Merrill Lynch and AIG and then the freeze on lending by nervous banks.
The Bank of Japan is been injecting $US10 to $US25 billion on some days to maintain liquidity in the Japanese money market, and has done US dollar swaps of upwards of $US100 billion with the US Fed to inject more US dollars into the economy
An interesting plus at this stage though from the Tankan survey was that a majority of companies say they still plan to boost investment, instead of cut it.
Japan's largest companies said they plan to increase investment 1.7% this year, but some economists warn that should the global crunch continue at current levels for much longer, that optimism could very well disappear and the news in the next Tankan, due in early January, could paint a very different story.
That 1.7% increase is much slower than in the past two Tankans, representing a slow winding back of plans.
Big Japanese companies expect recurring profits to fall 8% this fiscal year, on a year-on-year basis (six months ago they were predicting a small rise of 2.4%).
The large manufacturer index in the Tankan is still above numbers recorded during Japan's most recent recession in 1998-02 when survey plunged to minus 51 in 1998, as the Asian currency crisis was in full swing and the government had to buy failed lenders including Long-Term Credit Bank of Japan.
