Japan's jobless figures rise to a 50-year high

The death knell for the job-for-life principle – a central tenet of the Japanese post-war contract – was sounded yesterday as unemployment surged to a 50-year high.

The death knell for the job-for-life principle – a central tenet of the Japanese post-war contract – was sounded yesterday as unemployment surged to a 50-year high.

Official figures showed 5.5 per cent of the workforce was out of work last month – up from 5.4 per cent in October and 4.9 per cent at the start of the year.

Economists said a rise to 6 per cent was now likely by mid-2002 as the world economy continued to reel from the 11 September terrorist attacks.

A government official conceded the once-sacrosanct jobs-for-life system had unravelled. "We're seeing a higher number of people leaving their jobs involuntarily. Most of them are male, aged 45 to 54, heads of households," he said.

According to the government, the number of 45 to 54-year-old men without jobs was up by 130,000, compared with a year ago, to a record 440,000. The number of heads of households unemployed rose by 180,000 to just over 1 million.

Separate figures showed spending by households headed by salaried workers rose 0.5 per cent in November, slower than the 3.1 per cent rise last month.

The figures are the latest in a run of grim news. On Thursday, data showed a slump in industrial output to a 14-year low and drops in retail sales and construction orders for November.

Concerns of a prolonged recession have weighed on both Japan's stock market and the yen. The Nikkei ended its last trading day of 2001, up 0.8 per cent on the day – but down about 24 per cent on the year.

The yen, which was trading around 131.3 to the dollar in late afternoon, has fallen about 15 per cent this year and hit three-year lows on Thursday on speculation officials wanted it to weaken so Japan could export its way out of recession.

The figures will add impetus to the plans by Junichiro Koizumi, the prime minister, to take action to pull the country out of recession.

Banking shares rose yesterday on mounting speculation of a rescue deal after Mr Koizumi pledged to take "extraordinary steps" if needed to head off a financial crisis.

The Liberal Democratic Party's secretary general Taku Yamasaki told reporters the prime minister was ready to inject public funds into banks.

The number of jobless, 3.7 million, was the largest since records were first kept in 1953. The number of people who were fired rose a record 290,000 from a year ago to 1.23 million.

Companies were also hiring fewer workers last month. Just 53 positions were available for every 100 applicants at government-run job agencies, down from October's 55 and the lowest since March last year.