Japan’s government faced pressure for another stimulus package yesterday after plunging exports pushed the country, the world’s second largest economy, into its worst slump in 35 years.

Economists see little prospect for a quick rebound after a quarter-on-quarter fall of 3.3% in gross domestic product in the last three months of 2008.

The decline was worse than economists had forecast and equivalent to an annualised fall of 12.7% – the steepest drop since 1974, when import-dependent Japan suffered because of soaring oil prices.

Financial Times, Daily Yomiuri