By Duncan Bartlett
BBC News, Tokyo
As Japan heads into into 2009, the recession is taking its toll on all its leading companies.
No growth in 2009
Japan's economy is set to shrink this winter
Interest rate is close to 0%
The government is trying to stimulate the economy
Manufacturing firms, which employ about one fifth of the workforce are being particularly badly hit.
But there are some bright spots in the Japanese economic picture, too.
Toyota is one of the world's most efficient carmakers, but it's preparing for one of the toughest years in its 62-year history.
Toyota says its annual profits will be 75% lower than before.
Japan's carmakers rely heavily on US markets
It will present the final figure in March but in the meantime it has been laying off temporary staff and cutting the bonuses of managers.
Other big Japanese automotive firms such as Nissan and Mazda are also under pressure because of falling sales in key markets such as Japan, South Korea and the US.
But while the crisis in the US car industry has prompted General Motors, Ford and Chrysler to call for government help, no such bail out is being discussed in Japan.
"The Japanese automakers were in much better shape than their American counterparts before the credit crunch," says Michael Condon, editor-in-chief of the business magazine Japan Inc.
"But that's not to say they won't be in trouble in 2009.
The North American market that had provided them with a lot of growth has stagnated."
Mr Condon also points out that Toyota's policy of keeping thousands of permanent workers on its payroll despite little work for them to do could prove a major financial drain on the company.
If anything, the makers of the electrical goods that Japan has become so good at exporting to the world are facing an even bleaker year than the carmakers.
Electronics firms need a "must-have" gadget
Panasonic has slashed its annual profit forecast by 90% despite its dominant position in the market for large flat screen televisions.
Sony is to axe 16,000 full and part-time jobs in its consumer electronics division.
Part of the problem has been a lack of new "must-have" gadgets from the any big Japanese company.
Another factor has been the rise of the Japanese yen against other currencies.
That makes Japanese goods more expensive when they are sold abroad and hits the profits of exporters when the money they make overseas is converted back into yen in Japan.
"A lot of foreign currency experts are expecting the yen to remain strong, which will eat into the profits of all these businesses," says Mr Condon.
"The strength of Japan's financial institutions has cushioned the blow of the global economic turmoil somewhat, but the prevailing strength of the yen is a nightmare for manufacturers, which have seen their overseas markets decimated."
Japan has been fortunate in that it has not suffered the kind of intense credit crunch experienced in the US and Europe in 2007.
Japanese banks are far from immune to the global turmoil
Nevertheless, banks have become reluctant to lend money to companies that might not repay it, despite government encouragement to support small business.
Rising bankruptcy levels among small firms are one of the most serious signs of the recession.
Japan's largest bank, Nomura, is heading for its second year in a row of losses.
Both Nomura and Mitsubishi UFJ bought assets from distressed American banks in 2007 but Professor Noriko Hama from Doishisha University believes the purchases were prompted by a panic reaction.
"There was initially a lot of excitement about those initiatives, but what we have seen subsequently is that all of these Japanese institutions themselves were hit very hard by the crisis and are in fact losing a lot of money," says Professor Hama.
"I don't really see that other people are going to come and follow where these two banks went.
"If you jump headlong into distress sales you never know what you're going to end up with."