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Japanese Public Debt Hits All-Time High

High unemployment continues to plague Japan's workforce as the nation struggles with its most severe economic slowdown in 50 years.

The jobless rate held steady in May at 5.4 percent, unchanged from April. Three-point-seven million people are unemployed, the same number as a year earlier.

For the last two years, Japanese companies have slashed jobs as part of cost cutting plans, with many workers losing jobs after decades of working for one employer. Some companies are now reporting better profits as a result of this strategy, but the job market remains extremely tight, especially for young people and women of all ages.

Another sign of Japan's economic woes: Japan's public debt has swelled to a record high of $5.5 trillion. That is a 10 percent hike from a year earlier. The debt is a result of falling tax revenue and issuing more government bonds.

Tokyo hopes that by selling more bonds and pouring the money into public works projects, it will spark an economic rebound. Many economists doubt this strategy and say the government should try to lower the public debt, which is the highest among the world's major industrialized nations.

More bleak news from Japan's corporate sector. Moody's Investors Service has lowered Sony's long-term credit rating by one notch because of a poor outlook for Japan's electronics industry. Sony's prices tend to be higher than its competition, but Japan's thrifty consumers and deflation are forcing it to rethink its pricing strategy.

Naoki Takahashi, a credit analyst at Moody's in Tokyo, says that its decision to cut Sony's rating comes amid signs that the company will continue to lose money. He adds that Sony is not likely to significantly improve its performance soon.

Sony has vowed to overhaul its electronics business, saying it will invest in flat-screen television, digital video players and hand-held games.