The month of March was not kind to the second-largest economy in the world, as jobless rates and household spending are sure to take a toll on markets and exchange traded funds (ETFs).

During the month of March, the jobless rate in Japan jumped to the highest level in four years, while household spending has halted and deflationary fears are looming. Tomoko A. Hosaka for Yahoo Finance reports that the government released a bullish report on industrial production, but as of  Friday the unemployment rate rose to 4.8%, up from 4.4% in February,the worst reading since August 2004.

However, the unemployment picture may be worse than the number indicates, as rates do not include those who have simply stopped looking for work. The real economy is at stake since employment pictures lag the bigger picture of manufacturing and production.

Basically, the unprecedented collapse in global demand leaves the Japanese economy mired in its deepest recession since the end of World War II.

• iShares MSCI Japan Index (EWJ): down 9.8% year-to-date

Tags: Asia, EWJ, Global ETFs, Japan