Things are looking very bleak in Japan:
The Japanese economy, the second largest in the world after the United States, is deteriorating at its fastest pace since the first oil crisis of the 1970s, hurt by rapidly shrinking exports and anemic spending at home in the global financial crisis.
The real gross domestic product of Japan shrank at an annual rate of 12.7 percent from October to December after contracting over the two previous quarters, the government said Monday. In the fourth quarter, GDP dropped 3.3 percent from the previous period.
Japan is suffering from some of the same conditions as the U.S., including high unemployment exacerbated by an appreciating currency. But Japan is much more reliant on exports than the U.S. is, and has had a much less dynamic economy over the past few decades despite many rounds of stimulus and infrastructure spending. Japan's recovery will likely lag the recoveries of the U.S. and Europe, since they depend so heavily on external demand for their exports. A Fistful of Euros has much more, including a good analysis of why the situation there is likely to get much worse before it gets any better.