You have to feel some sympathy for Shoichi Nakagawa. If you were the Japanese Finance Minister and knew the dire state of your economy you too might need the odd snifter. (Mr Nakagawa blamed his shambolic performance at the G7 meeting in Rome on cold medicine, which makes you wonder what they put in Japanese Night Nurse.)

A few hours after Mr Nakagawa's tired and emotional press conference, it was revealed that the Japanese economy shrank by 3.3 per cent in three months to December. That is an annualised rate of 12.7 per cent, the sharpest drop since the oil crisis of the early 1970s.

The figures show that while Japan was not badly affected by the first leg of the credit crisis -- its banks were relatively uncontaminated by toxic US mortgage assets - the resulting global slowdown has hit it harder than most other countries. As a manufacturer of upmarket consumer durables and capital goods, Japan benefited from the credit-fuelled boom in western spending in the past few years.

But now that credit has evaporated and both consumers and companies are pulling in their horns, Japanese exports have crashed.

In the three months to December, exports were down 13.9 per cent on the previous quarter.

Domestic consumption has also weakened, dropping 0.4 per cent in the quarter, as job losses have mounted.

In spite of the plummeting economy the yen has risen sharply, which puts further pressure on Japan's struggling exporters.

Luckily, a soaraway currency is one problem Britain does not have. The sagging pound may help to keep Alistair Darling off the bottle.

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