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Japan Unemployment Rate Sharply Higher - 2001-10-30

Japan's unemployment rate jumped sharply in September. Some government officials say the latest jobless figures emphasize the need for economic reforms.

With unemployment at a record 5.3 percent, Japanese government officials and private analysts say it could be more than a year before the economy recovers.

The government said Tuesday that unemployment rose rapidly in September from the five percent level recorded in August. It was the biggest jump recorded in unemployment since 1967. The government said most of the job losses came from layoffs in the manufacturing industry.

Japan's economy has been struggling for nearly a decade, since the collapse of the 1980s boom in stock and property prices. Some cabinet ministers say the latest unemployment numbers mean the government must continue with its economic reforms, although they may mean more pain in the short term.

Chikara Sakaguchi, the health, labor and welfare minister, says the reforms start with helping banks get rid of the massive bad loans they have on their books. "We will start cleaning up the nonperforming loans. We have to understand that cleaning up the bad loans will affect people's employment status," Sakaguchi continues. Japan's "employment condition is in a serious state."

On Monday, the Bank of Japan, the nation's central bank, said it expected the economy to contract in the current fiscal year, which ends in March. The central bank said the recession is likely to continue through next year and possibly into 2003.