Japan is the second largest economy in the world, vastly overshadowing any other Asian nation.
It has a huge industrial base boasting global competitors like Sony and Toyota, the largest foreign exchange reserve in the world and one-third of the world's savings. Yet Japan has fallen into its worst recession since World War II, styming efforts to pull Asia out of its economic quagmire and posing a potential threat to prosperity in the United States and Europe. He said corporate profits will drop more than 30 percent this year, wages are down and prices are down. Japan's most serious problem is the deterioration of its entire banking sector. For more than seven years, Japanese authorities have tried to put off dealing with Japan's bad loan mess.