Japan can hardly be blamed for reaching into its emergency toolkit and pulling out the wrench marked “industrial bail-out”. After all, everybody else is at it. Tokyo has watched from the sidelines as the formerly free-trade-espousing US – never shy about lecturing Japan on its statist ways – plans a $25bn bail-out of a car industry brought low largely by the competitive superiority of Japanese manufacturers. Other countries, including France and Taiwan, are gearing up to bail out so-called strategic industries that compete with those of Japan.

Japanese industry has fallen rapidly into a serious state. Exports dived 35 per cent in December. Smaller companies are reeling from a collapse in demand and a sharp appreciation of the yen. An index of small company confidence this week showed a dismal reading of just 19 in January, the lowest ever for that month. Even titans of Japanese industry are struggling. Toyota says it is headed for its first operating loss in decades. Sony, not such a stranger to red ink, could lose $3bn in the year to March 2009.