It has been called the victimless recession: a historic financial bust that has battered faceless banks and insurance companies but left individual Japanese unharmed. For a while it even seemed to be true, but no longer. Though the Nikkei index rallied last week after hitting a six-year low, Japan’s economy is foundering, stocks are likely to go lower still and the slump is claiming victims daily. The formerly high-flying Tsurumaki is one, but so, too, more poignantly, is Masao Nakajima, a 69-year-old retired civil servant from the outskirts of Tokyo who, like scores of other individual investors, has had much of his savings obliterated in the stockmarket bust.

Unhappily for the likes of Nakajima, the hard times will not ease soon. Nearly every sector in Japan’s economy is hurting: domestic auto sales last month rose only slightly, the first increase in more than a year. Consumer electronics sales continue to plunge, as consumers cut back. And this year more than 12,000 companies are expected to Nearly all, to be sure, will be small- and medium-size firms, the majority “bubble related”-real-estate and construction firms that flourished in the boom. As such, says Takashi Takatsu of Teikoku Databank, which monitors financial failures, “we consider those unserious bankruptcies.”

But they are serious enough to the employees who work for firms that go under. The unemployment rate in Japan-though still less than 3 percent-has begun rising, partly because of the accelerating pace of bankruptcies. More than 1.6 million Japanese are now out of work. Last year, for instance, creditors took control of Maruko Inc., a publicly traded real-estate firm that had once employed 500 people; through layoffs and attrition, its work force is now half of what it was. For people who work for Maruko, and for those who once did, the company’s reputation trails in their wake. " I think [prospective employers] think twice when I approach them for a job," says a 28-year-old former Maruko office worker.

So far, though, the major casualties in Japan’s bust have been individual investors who took risky flings in the stock market during the roaring ’80s. As their losses pile up, investors are turning to the courts for help-an unusual step in one of the world’s least litigious societies. According to recent press reports, 235 securities-fraud cases have been filed, with many more expected to come. Just as many American investors did after the crash of 1987, Japanese are alleging that brokerage firms lured them into highly risky deals by touting them as virtually risk-free in the late ’80s. Consider securities transactions called warrants, which were popular among investors-large and small-in the late 1980s. Japanese companies raised more than $300 billion at very low interest rates by issuing them, and brokerages peddled them furiously through their retail networks. Investors who bought them could, at a specified future date, convert them into common stock and then sell–presumably for a price far higher than when they were bought. Because the stockmarket, of course, never went down. It only went up. That, says Toshiro Ueyanagi, a lawyer representing investors suing securities companies, " was always the sales pitch. ‘You couldn’t lose,’ they said. The market just kept going up."

The case of Nakajima is typical. The retired civil servant is suing Nomura Securities for fraud, claiming they never apprised him of the risk involved in the investment. In 1989 Nakajima took his retirement money, as well as his daughter’s savings and a bank loan-about $295,000-and purchased risky stock warrants from a Nomura broker. Today nearly all is gone. “They were so persistent,” Nakajima says now of the Nomura salesmen. “Finally I just said to hell with it.” Nomura denies the charge.

Meanwhile, the damage is spreading beyond single investors. One example: the local water bureau in the town of Yamato Koriyama, 325 miles from Tokyo. A few years ago some of the bureaucrats wagered $62,000 of the public’s money-and the public took a beating. The warrants are now worthless, and the water-bureau employees had to make good on the soured investment out of their own pockets.

But investors taking their claims to court will have an uphill fight. That’s because there’s little precedent for cases alleging securities fraud. In the last 40 years, says attorney Ueyanagi, individual investors have brought only 30 suits against Japanese securities dealers, nearly all unsuccessful. This time, the victims in Japan’s “victimless” recession may have to be content with driving home the simple lesson in Newtonian finance that got completely lost in Japan in the 1980s: what goes up often comes down-hard.