Jobless rise awaits Japan's new leader
Saturday 01 August 1998
On Thursday, Taichi Sakaiya, the new director-general of the Economic Planning Agency, had described Japan's jobless level as offering some cause for comfort, observing that it was "still lower than those in some European countries."
The latest figures, released just a day later, show Japan closing the gap with Britain (4.8% in June) and the US (4.5 per cent).
Acknowledging that the time left for action is now "not very long", Mr Obuchi indicated on Friday that he was willing to stay in power only until the economy is revitalised, according to Tokyo spokesman. His official term in office is due to expire next September.
Mr Obuchi added that he will be ready to leave once he is sure that the measures he has adopted are effecting a revival of the economy.
Hinting at strategy, he also mentioned that people should be prepared to suffer some bankruptcies in the banking sector. On Thursday, new finance minister Kiichi Miyazawa had said that the government planned to submit six bills to the current parliament session that would include a "total plan" to bail out banks.
Japan's jobless rate, which had been steady at 3-3.5 per cent for the past three years, broke the 4 per cent barrier in April, standing at 4.1 per cent in both April and May.
The jobless rate among women, meanwhile, reached a post-war high of 4.2 per cent in June, a 0.3 per cent increase from one month earlier.
The latest figures show 2.84 million people out of work in June, an increase of 550,000 from one year earlier. The Labour Ministry added to the gloom by announcing that the ratio of job offers to job seekers dropped to 0.51 in June, the worst figure since January 1978.
The jobless downturn is likely to intensify calls for the speedy introduction of permanent tax cuts, of up to 10 trillion yen, and a cut in the consumption tax, possibly to its earlier level of 3 per cent - the two measures regarded as most critical to the creation of new jobs.
The top priority, however, will continue to be dealing with Japan's bad loans, totalling in excess of $600 billion.
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