Read about the Japanese Economy- How does that situation compare to the U.S. now?

Japanese economy hitting record lows

Japan’s economy is showing signs of slipping into a serious recession. Japanese exports dropped by their largest ever amount in the last quarter. The Japanese Finance Ministry announced on December 22nd that its exports dropped sharply by 27% compared with the previous year. This represents a whopping $60 billion fall in export revenues. Japan is being hit badly by the rising Yen. This is making its cars and electrical goods extremely expensive overseas. Sales in its biggest market, the USA, are really suffering. Toshihiro Nagahama, a chief economist with the Dai-Ichi Life Research Institute said: "Japanese exports are in a state of annihilation." The Japanese government predicts worsening times ahead for the world’s second largest economy.
A key sign that Japan's economy is in trouble is the recent loss reported by Toyota. Executives from the biggest carmaker in Japan said the company will experience its first loss in 71 years. It expects to lose over $1.6 billion. This is a considerable downturn from 2007, when it made profits of $2.27 billion and overtook General Motors as the world’s largest car maker. Toyota president Katsuaki Watanabe said worldwide sales were down for 2008, and could not provide a forecast for 2009. The company said the downturn was because of a “faster than expected contraction of the auto market”. Koichi Ogawa of Daiwa Investments said: "This is very, very, very bad. There's a chance Toyota could also fall into the red in the next business year."