The annual Dai-Ichi Seimei poetry competition, where the average Japanese working man vents his spleen in verse, has revealed a mood of chronic dread and despair on the payrolls of the world’s second biggest economy.

Timed to coincide with the end of Japan’s financial year, the offerings of terse, 17-syllable senryu poems have captured just how miserable everyone feels. Cost-cutting, unemployment, penury and fruitless visits to “Hello Work” job centres are recurrent themes.

The tone is hardly surprising. As the books closed on fiscal ’08 today, Japanese were served another helping of terrible data on the economy and were offered only the slenderest thread of hope by the Government itself. On the eve of his departure for London and the G20 meeting, Japan’s dismally unpopular Prime Minister Taro Aso called for a further round of stimulus measures that government sources told The Times might amount to around £100 billion more in fiscal spending. The proposal, said analysts at Bank of Tokyo Mitsubishi UFJ, was “starved of detail”, but came with confirmation from the Prime Minister that the country was undoubtedly “still in a crisis”.

The figures released on Tuesday were unremittingly grim. Unemployment soared to a three-year high of 4.4 per cent in February and the monthly pace of decline in the jobs-to-applicants ratio was its quickest in over three decades. Housing starts tumbled by nearly 25 per cent from January levels, and household spending lurched downwards as more and more families prepare mentally for the possibility that one or more members will lose their jobs.

“I’d love to exploit the strong yen, but I haven’t got any”, ran one poem that made the competition shortlist.

The real problem, say economists, is that the same sense of hopelessness may also have worked its way up into the boardrooms. With one eye on the build-up to the G20 meeting in London and another on the seething economic turmoil at home, the Tokyo markets are on Wednesday bracing for the release of the Bank of Japan’s quarterly Tankan survey of business sentiment. Like the Daiichi poetry competition, the Bank of Japan survey represents only “soft” data, but its importance in fixing the direction of trading, say brokers, is paramount.

Unfortunately, for those investors hoping for some continuation of last week’s strong rally, the prognosis does not look good. The chief executives who answer the survey have been watching the same remorseless flow of bad economic news as their employees. They have seen exports plunge by nearly 50 per cent in February and have themselves been responsible for a dramatic slowdown in industrial production – measures that most analysts have applauded as a quick and decisive response to the drop in global demand.

Analysts in Tokyo told The Times that the February rise in unemployment was merely the foretaste of more acute increases still to come, with some predicting that the rate could surge to as much as 7 per cent by the end of the year.

So far, said BNP Paribas economist Hiroshi Shiraishi, Japanese companies have managed to ride the global downturn without spectacular job cuts: they have turned to a variety of measures like work-sharing programmes, and shorter working weeks in an effort to appear responsible. That, he said, will not be sustainable as the year rolls on and there emerges a realistic chance that Japanese companies may face a second year in the red. “Then we will see serious restructurings,” he added.

Mr Aso’s attempt to talk-up the prospects of an early recovery as fiscal 2009 dawns were equally lackluster. His talk yesterday of Japan’s rediscovering growth through exports of culture, animation, fashion and pop-music will do little to allay the concerns of the corporate leaders of an economy that makes its money from cars, electronics, machinery and engineering.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive