Japan's main share index has finished 2002 at its weakest year-end close for 20 years, after losing 19% of its value over the last 12 months.

Concerns over the bad loan crisis afflicting Japan's banking systems, and worries that soaring unemployment could prolong a decade-long economic slowdown, weighed on the index all year.

The Nikkei 225 fell 1.55% in its last day of trade to finish at 8,578.9, its lowest year-end close since 1982.

"It has been a disastrous market," said Tetsuya Ishijima at brokerage Okasan Securities.

The Tokyo Stock Exchange will be closed through the New Year holidays, reopening for an abridged trading session 6 January.

Economic failures

The failure of Prime Minister Junichiro Koizumi to fulfil his election promise to restructure the world's second largest economy depressed the Janese stock market in 2002.

Exports, the main engine of Japan's economy, have also started to fall, adding to the gloom.

The coming year is expected to be dominated by the actions of hard-line reformer Heizo Takenaka, who was appointed to head Japan's banking watchdog, the Financial Services Agency, at the end of September.

His appointment was responsible for sending share prices to 19-year lows in October amid fears that he might take drastic action to deal with Japan's bad loan crisis.

But subsequent political manoeuvring that forced Mr Takenaka to soften his stance sent share prices lower still, leaving the markets in "damned if they do, damned if they don't" situation.

US threats of a war against Iraq and heightened tensions with North Korea also knocked the Nikkei lower, as it has most markets.